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Full text of "Social security act and related laws including amendments through January 2, 1976"

94th Congress \ COMMITTEE PRINT 

2d Session^/ 1?*'"' 

/^ U %-~ 

^ &° ' 



SC*btofeMcURITY ACT 

and Related Laws 

(Including Amendments Through January 2, 1976) 



COMMITTEE ON FINANCE 
UNITED STATES SENATE 

Russell B. Long, Chairman 




FEBRUARY 1, 1976 



Printed for the use of the Committee on Finance 



< 



95th Congress 
1st Session 



} 



COMMITTEE PBINT 



First Set of Revised Pages to 

The 

SOCIAL SECURITY ACT 

and Related Laws 

(As Amended Through December 31, 1976) 



COMMITTEE ON FINANCE 
UNITED STATES SENATE 

Russell B. Long, Chairman 




-]7- / / 

APRIL 21, 1977 



Printed for the use of the Committee on Finance 



U.S. GOVERNMENT PRINTING OFFICE 
87-463 O WASHINGTON : 1977 



Revised Pages to : The Social Security Act and Related Laws 
(As Amended Through December 31, 1976) 



First Set of Revised Pages (April 1977) 



The first set of revised pages to the committee print containing the 
Social Security Act and related laws reflects the amendments made by 
Public Law 95-19 (Emergency Unemployment Compensation Exten- 
sion Act of 1977) and also includes the changes made by Public Law 
91-160, which was inadvertently omitted from the last printing. The 
pages of the basic print which are affected by this revision are: 

Pages Revised: Pages Added: 



703-710 
713-714 
791 

794 

App. A. p. (ii) 



495-502 
531-532 
632 



640-644 
659 



502(a) 

532(a)-532(c) 
644(a) 

710(a)-710(b) 
795 



94 S £ on ? ress ) COMMITTEE PRINT 

2d Session J 



The 

SOCIAL SECURITY ACT 

and Related Laws 

(Including Amendments Through January 2, 1976) 



COMMITTEE ON FINANCE 
UNITED STATES SENATE 

Russell B. Long, Chairman 



FEBRUARY 1, 1976 



Printed for the use of the Committee on Finance 



U.S. GOVERNMENT PRINTING OFFICE 
64-310 O WASHINGTON : 1976 



For sale by the Superintendent of Documents, U.S. Government Printing Office 

Washington, D.C. 20402 - Price $5. 



COMMITTEE ON FINANCE 



RUSSELL B. LONG, Louisiana, Chairman 



HERMAN TALMADGE, Georgia 
VANCE HARTKE, Indiana 
ABRAHAM RIBICOFF, Connecticut 
HARRY F. BYRD, Jr., Virginia 
GAYLORD NELSON, Wisconsin 
WALTER F. MONDALE, Minnesota 
MIKE GRAVEL, Alaska 
LLOYD BENTSEN, Texas 
WILLIAM D. HATHAWAY, Maine 
FLOYD K. HASKELL, Colorado 



CARL T. CURTIS, Nebraska 
PAUL J. FANNIN, Arizona 
CLIFFORD P. HANSEN, Wyoming 
ROBERT DOLE, Kansas 
BOB PACKWOOD, Oregon 
WILLIAM V. ROTH, Jr., Delaware 
BILL BROCK, Tennessee 



Michael Stern, Staff Director 
Donald V. Moorbhead, Chief Minority Counsel 



(ID 



PREFACE 

Since the 92d Congress, numerous laws have been enacted amend- 
ing the Social Security Act or otherwise directly affecting programs 
under that act. In order to provide a convenient reference to the 
Social Security Act as it has been amended by these various laws, 
this document has been prepared. It includes all of the titles of that 
act currently in force with all amendments up to January 2, 1976. Also 
included are the full text of the Federal-State Extended Unemploy- 
ment Compensation Act, as amended, and the Emergency Unemploy- 
ment Compensation Act of 1974, as amended, and pertinent excerpts 
from the Internal Revenue Code and from various public laws enacted 
since the 92d Congress. 

This document is intended to supplement and not to replace the 
Compilation of the Social Security Laws which is prepared by the 
Social Security Administration and published from time to time as a 
document of the House of Representatives. The most recent edition 
of that Compilation was issued as House Document No. 93-117 (in 2 
volumes) and contained the Social Security Act and related laws as 
amended through January 1, 1973. The Compilation, although not con- 
taining amendments after that date, does have several features not 
found in this current document. In particular, the Compilation has 
far more extensive footnotes, contains an index, and includes excerpts 
from numerous laws affecting social security programs which are not 
included in the current document. 

It is expected that, as subsequent amendments to the Social Security 
Act and related laws are enacted or as changes are made through the 
operation of certain automatic provisions of existing law, appropriate 
revision pages will be printed from time to time. 

This document has been prepared solely for convenient reference 
purposes. It does not have the effect of law. 

(iii) 



Digitized by the Internet Archive 

in 2013 



http://archive.org/details/socrityacOOunit 



CONTENTS 



Social Security Act as Amended : 

Title I — Grants to States for Old-Age Assistance and Med- Page 
ical Assistance for the Aged 1 

Title II — Federal Old- Age, Survivors, and Disability In- 
surance Benefits 15 

Title III — Grants to States for Unemployment Compensa- 
tion Administration 201 

Title IV — Grants to States for Aid and Services to Needy 
Families with Children and for Child Welfare Services 205 

Title V— Maternal and Child Health and Crippled Chil- 
dren's Services 255 

Title VI— [Repealed effective Oct. 1, 1975] 267 

Title VII— Administration 269 

Title VIII — Taxes With Respect to Employment (super- 
seded by Chapter 21 of the Internal Revenue Code of 
1954) 274 

Title IX — Miscellaneous Provisions Relating to Employ- 
ment Security 275 

Title X— Grants to States for Aid to the Blind 291 

Title XI — General Provisions and Professional Standards 
Review 301 

Title XII — Advances to State Unemployment Funds 343 

Title XIII — Reconversion Unemployment Benefits for Sea- 
men (the provisions of this title have expired) 345 

Title XIV — Grants to States for Aid to the Permanently 

and Totallv Disabled 347 

Title XV— ["Repealed] (See chapter 85, title 5, U.S.C.)___ 355 

Title XVI — Grants to States for Aid to the Aged, Blind, 
or Disabled, or for Such Aid and Medical Assistance for 
the Aged 357 

Title XVI — Supplemental Security Income for the Aged, 
Blind, and Disabled 373 

Title XVII — Grants for Planning Comprehensive Action 

to Combat Mental Retardation 395 

Title XVIII — Health Insurance for the Aged and Dis- 
abled 397 

(V) 



Title XIX — Grants to States for Medical Assistance Pro- Pa g e 

grams 499 

Title XX — Grants to States for Services 533 

Selected Provisions of the Internal Revenue Code of 1954: 
Subtitle A — Income Taxes : 

Chapter 1 — Normal Taxes and Surtaxes 547 

Subchapter A, Part IV, Subpart A — Credits 

Allowable 547 

Section 40 — Expenses of Work Incentive 

Programs 547 

Section 43 — Earned Income 547 

Subpart C — Rules for Computing Credit for Expenses of 

Work Incentive Programs 549 

Section 50A 549 

Section 50B 552 

Subchapter B, Part VI — Itemized Deductions for Indi- 
viduals and Corporations 555 

Section 188 — Amortization of Certain Expenditures 

for On-the- Job Training and Child Care Facilities. 555 
Section 214 — Household and Dependent Care Services 

Xecessary for Gainful Employment 556 

Chapter 2 — Tax on Self -Employment Income 558 

Subtitle C — Employment Taxes : 

Chapter 21 — Federal Insurance Contributions Act 571 

Chapter 22 — Railroad Retirement Tax Act 604 

Chapter 23 — Federal Unemployment Tax Act 615 

Chapter 25 — General Provisions Relating to Employ- 
ment Taxes 645 

Subtitle F — Procedure and Administration : 

Chapter 61 — Information and Returns 645 

Chapter 62 — Time and Place for Paying Tax 654 

Chapter 63 — Assessments 655 

Chapter 64— Collection 657 

Chapter 65 — Abatements, Credits and Refunds 660 

Chapter 66— Limitations 666 

Chapter 67— Interest 670 

Chapter 68— Additions to the Tax, Additional 

Amounts, and Assessable Penalties 671 

Chapter 75— Crimes, Other Offenses, and Forfeitures. 676 
Chapter 78— Discovery of Liability and Enforce- 
ment of Title 678 

Chapter 79— Definitions 680 

Chapter 80— General Rules 680 

Selected Unemployment Insurance Laws : 

Emergency Unemployment Compensation Act of 1974 683 

Federal-State Extended Unemployment Compensation 

Act, as amended 691 

Excerpt from Public Law 93-618, the Trade Act of 1974, 

(Adjustment Assistance for Workers) 698 

(VI) 



VII 



Excerpts from Public Laws related to the Social Security Act : p age 

Public Law 93-66, as amended 713 

Public Law 93-233, as amended 721 

Public Law 93-368 729 

Public Law 93-480 729 

Public Law 93-647, as amended 729 

Public Law 94-12 731 

Public Law 94-45 733 

Public Law 94-88 736 

Public Law 94-164 738 

Public Law 94-182 739 

Public Law 94-202 742 

Appendix : 

A — Amending Legislation (i) 

B — Social Security Taxes (iii) 



SOCIAL SECURITY ACT, AS AMENDED 



AN ACT 

To provide for the general welfare by establishing a system of Federal old-age 
benefits, and by enabling the several States to make more adequate provision 
for aged persons, blind persons, dependent and crippled children, maternal and 
child welfare, public health, and the administration of their unemployment 
compensation laws ; to establish a Social Security Board ; to raise revenue ; 
and for other purposes. 

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 

TITLE I— GRANTS TO STATES FOR OLD-AGE ASSIST- 
ANCE AND MEDICAL ASSISTANCE FOR THE AGED 1 



Page 8 

Sec. 1. Appropriation 1 

Sec. 2. State Old-Age Assistance and Medical Assistance Plans 2 

Sec. 3. Payment to States 5 

Sec. 4. Operation of State Plans 11 

Sec. 5. Administration . 12 

Sec. 6. Definitions 12 



Appropriation 

Section 1. For the purpose (a) of enabling each State, as far as 
practicable under the conditions in such State, to furnish financial 
assistance to aged needy individuals, (b) of enabling each State, as 
far as practicable under the conditions in such State, to furnish medi- 
cal assistance on behalf of aged individuals who are not recipients 
of old-age assistance but whose income and resources are insufficient 
to meet the costs of necessary medical services, and (c) of encourag- 
ing each State, as far as practicable under the conditions in such 
State, to furnish rehabilitation and other services to help individuals 
referred to in clause (a) or (b) to attain or retain capability for self- 
care, there is hereby authorized to be appropriated for each fiscal 
year a sum sufficient to carry out the purposes of this title. The sums 
made available under this section shall be used for making payments 
to States which have submitted, and had approved by the Secretary 
of Health, Education, and Welfare (hereinafter referred to as the 
"Secretary"), State plans for old-age assistance, or for medical assist- 



1 P.L. 92-603, sec. 303, repealed title I effective January 1, 1974, but such repeal does not 
apply to Puerto Rico, Guam, and the Virgin Islands. 

2 This table of contents does not appear in the law. 



(1) 



Sec. 2(a) 



2 



ance for the aged, or for old-age assistance and medical assistance for 
the aged. 

State Old-Age and Medical Assistance Plans 

Sec. 2. (a) A State plan for old-age assistance, or for medical 
assistance for the aged, or for old-age assistance and medical assistance 
for the aged must — 

(1) except to the extent permitted by the Secretary with re- 
spect to services, provide that it shall be in effect in all political 
subdivisions of the State, and, if administered by them, be man- 
datory upon them ; 

(2) provide for financial participation by the State; 

(3) either provide for the establishment or designation of a 
single State agency to administer the plan, or provide for the 
establishment or designation of a single State agency to supervise 
the administration of the plan ; 

(4) (A) provide for granting an opportunity for a fair hearing 
before the State agency to any individual whose claim for assist- 
ance under the plan is denied or is not acted upon with reason- 
able promptness, and (B) that if the State plan is administered 
in each of the political subdivisions of the State by a local agency 
and such local agency provides a hearing at which evidence may 
be presented prior to a hearing before the State agency, such local 
agency may put into effect immediately upon issuance its decision 
upon the matter considered at such hearing ; 

(5) provide (A) such methods of administration (including 
methods relating to the establishment and maintenance of per- 
sonnel standards on a merit basis, except that the Secretary shall 
exercise no authority with respect to the selection, tenure of office, 
and compensation of any individual employed in accordance with 
such methods) as are found by the Secretary to be necessary for 
the proper and efficient operation of the plan, and (B) for the 
training and effective use of paid subprofessional staff, with par- 
ticular emphasis on the full-time or part-time employment of re- 
cipients and other persons of low income, as community service 
aides, in the administration of the plan and for the use of nonpaid 
or partially paid volunteers in a social service volunteer program 
in providing services to applicants and recipients and in assisting 
any advisory committees established by the State agency ; 

(6) provide that the State agency will make such reports, in 
such form and containing such information, as the Secretary may 
from time to time require, and comply with such provisions as 
the Secretary may from time to time find necessary to assure the 
correctness and verification of such reports ; 



3 



Sec. 2(a) 



(7) provide safeguards which permit the use or disclosure of 
information concerning applicants or recipients only (A) to 
public officials who require such information in connection with 
their official duties or (B) to other persons for purposes directly 
connected with the administration of the State plan ; 

(8) provide that all individuals wishing to make application 
for assistance under the plan shall have opportunity to do so, and 
that such assistance shall be furnished with reasonable prompt- 
ness to all eligible individuals ; 

(9) provide, if the plan includes assistance for or on behalf of 
individuals in private or public institutions, for the establishment 
or designation of a State authority or authorities which shall be 
responsible for establishing and maintaining standards for such 
institutions ; 

(10) if the State plan includes old-age assistance — 

(A) provide that the State agency shall, in determining 
need for such assistance, take into consideration any other 
income and resources of an individual claiming old-age as- 
sistance, as Avell as any expenses reasonably attributable to 
the earning of any such income ; except that, in making such 
determination, (i) the State agency may disregard not more 
than $7.50 per month of any income and (ii) of the first $80 
per month of additional income which is earned the State 
agency may disregard not more than the first $20 thereof 
plus one-half of the remainder ; 

(B) include reasonable standards, consistent with the ob- 
jectives of this title, for determining eligibiltiy for and the 
extent of such assistance ; and 

(C) provide a description of the services (if any) which 
the State agency makes available (using whatever internal 
organizational arrangement it finds appropriate for this pur- 
pose) to applicants for and recipients of such assistance to 
help them attain self -care, including a description of the 
steps taken to assure, in the provision of such services, maxi- 
mum utilization of other agencies providing similar or re- 
lated services; and 

(11) if the State plan includes medical assistance for the 
aged — 

(A) provide for inclusion of some institutional and some 
noninstitutional care and services ; 

(B) provide that no enrollment fee, premium, or similar 
charge will be imposed as a condition of any individual's 
eligibility for medical assistance for the aged under the plan ; 



Sec. 2(a) 



4 



(C) provide for inclusion, to the extent required by regula- 
tions prescribed by the Secretary, of provisions (conforming 
to such regulations) with respect to the furnishing of such 
assistance to individuals who are residents of the State but 
are absent therefrom ; 

(D) include reasonable standards, consistent with the ob- 
jectives of this title, for determining eligibility for and the 
extent of such assistance ; and 

(E) provide that no lien may be imposed against the prop- 
erty of any individual prior to his death on account of medi- 
cal assistance for the aged paid or to be paid on his behalf 
under the plan (except pursuant to the judgment of a court 
on account of benefits incorrectly paid on behalf of such indi- 
vidual), and that there shall be no adjustment or recovery 
(except, after the death of such individual and his surviving 
spouse, if any, from such individual's estate) of any medical 
assistance for the aged correctly paid on behalf of such indi- 
vidual under the plan ; 

(12) if the State plan includes assistance to or in behalf of 
individuals who are patients in institutions for mental diseases — 

(A) provide for having in effect such agreements or other 
arrangements with State authorities concerned with mental 
diseases, and, where appropriate, with such institutions, as 
may be necessary for carrying out the State plan, including 
arrangements for joint planning and for development of al- 
ternate methods of care, arrangements providing assurance of 
immediate readmittance to institutions where needed for in- 
dividuals under alternate plans of care, and arrangements 
providing for access to patients and facilities, for furnishing 
information, and for making reports ; 

(B) provide for an individual plan for each such patient 
to assure that the institutional care provided to him is in his 
best interests, including, to that end, assurances that there 
will be initial and periodic review of his medical and other 
needs, that he will be given appropriate medical treatment 
within the institution, and that there will be a periodic deter- 
mination of his need for continued treatment in the 
institution ; 

(C) provide for the development of alternate plans of 
care, making maximum utilization of available resources, for 
recipients who would otherwise need care in such institutions, 
including appropriate medical treatment and other assist- 
ance; for services referred to in section 3(a) (4) (A) (i) and 
(ii) which are appropriate for such recipients and for such 



5 



Sec. 3(a) 



patients ; and for methods of administration necessary to as- 
sure that the responsibilities of the State agency under the 
State plan with respect to such recipients and such patients 
will be effectively carried out ; and 

(D) provide methods of determining the reasonable cost 
of institutional care for such patients ; and 
(13) if the State plan includes assistance to or in behalf of 
patients in public institutions for mental diseases, show that the 
State is making satisfactory progress toward developing and im- 
plementing a comprehensive mental health program, including 
provision for utilization of community mental health centers, 
nursing homes, and other alternatives to care in public institu- 
tions for mental diseases. 

(b) The Secretary shall approve any plan which fulfills the con- 
ditions specified in subsection (a), except that he shall not approve 
any plan which imposes, as a condition of eligibility for assistance 
under the plan — 

(1) an age requirement of more than sixty-five years; or 

(2) any residence requirement which (A) in the case of appli- 
cants for old-age assistance, excludes any resident of the State who 
has resided therein five years during the nine years immediately 
preceding the application for old-age assistance and has resided 
therein continuously for one year immediately preceding the ap- 
plication, and (B) in the case of applicants for medical assistance 
for the aged, excludes any individual who resides in the State ; or 

(3) any citizenship requirement Avhich excludes any citizen of 
the United States. 

At the option of the State, the plan may provide that manuals and 
other policy issuances will be furnished to persons without charge for 
the reasonable cost of such materials, but such provision shall not be 
required by the Secretary as a condition for the approval of such plan 
under this title. 

(c) Nothing in this title shall be construed to permit a State to have 
in effect with respect to any period more than one State plan approved 
under this title. 

Payment to States 

Sec. 3. (a) From the sums appropriated therefor, the Secretary of 
the Treasury shall pay to each State which has a plan approved under 
this title, for each quarter, beginning with the quarter commencing 
October 1, 1960— 

( 1 ) in the case of any State other than Puerto Rico, the Virgin 
Islands, and Guam, an amount equal to the sum of the following 
proportions of the total amounts expended during each month of 
such quarter as old-age assistance under the State plan (including 



Sec. 3(a) 



6 



expenditures for premiums under part B of title XVIII for indi- 
viduals who are recipients of money payments under such plan 
and other insurance premiums for medical or any other type of 
remedial care or the cost thereof) — 

(A) 3 % 7 of such expenditures, not counting so much of 
any expenditure with respect to such month as exceeds the 
product of $37 multiplied by the total number of recipients 
of old-age assistance for such month (which total number, 
for purposes of this subsection, means (i) the number of 
individuals who received old-age assistance in the form of 
money payments for such month, plus (ii) the number of 
other individuals with respect to whom expenditures were 
made in such month as old-age assistance in the form of 
medical or any other type of remedial care) ; plus 

(B) the larger of the following : 

(i) (I) the Federal percentage (as defined in section 
1101(a)(8)) of the amount by which such expendi- 
tures exceed the amount which may be counted under 
clause (A), not counting so much of such excess with 
respect to such month as exceeds the product of $38 mul- 
tiplied by the total number of recipients of old-age assist- 
ance for such month, plus (II) 15 per centum of the 
total expended during such month as old-age assistance 
under the State plan in the form of medical or any other 
type of remedial care, not counting so much of such ex- 
penditure with respect to such month as exceeds the 
product of $15 multiplied by the total number of recip- 
ients of old-age assistance for such month, or 

(ii) (I) the Federal medical percentage (as defined 
in section 6(c)) of the amount by which such expendi- 
tures exceed the maximum which may be counted under 
clause (A), not counting so much of any expenditures 
with respect to such month as exceeds (a) the product of 
$52 multiplied by the total number of such recipients of 
old-age assistance for such month, or (b) if smaller, the 
total expended as old-age assistance in the form of medi- 
cal or any other type of remedial care with respect to such 
month plus the product of $37 multiplied by such total 
number of such recipients, plus (II) the Federal per- 
centage of the amount by which the total expended dur- 
ing such month as old-age assistance under the State 
plan exceeds the amount which may be counted under 
clause (A) and the preceding provisions of this clause 
(B) (ii) , not counting so much of such excess with respect 



7 



Sec. 3(a) 



to such month as exceeds the product of $38 multiplied by 
the total number of such recipients of old-age assistance 
for such month ; 

(2) in the case of Puerto Rico, the Virgin Islands, and Guam, 
an amount equal to — 

(A) one-half of the total of the sums expended during 
such quarter as old-age assistance under the State plan (in- 
cluding expenditures for premiums under part B of title 
XVIII for individuals who are recipients of money payments 
under such plan and other insurance premiums for medical 
or any other type of remedial care or the cost thereof), not 
counting so much of any expenditure with respect to any 
month as exceeds $37.50 multiplied by the total number of 
recipients of old-age assistance for such month; plus 

(B) the larger of the following amounts: (i) one-half of 
the amount by which such expenditures exceed the maximum 
which may be counted under clause (A), not counting so 
much of any expenditure with respect to any month as ex- 
ceeds (I) the product of $45 multiplied by the total number 
of such recipients of old-age assistance for such month, or 
(II) if smaller, the total expended as old-age assistance in 
the form of medical or any other type of remedial care with 
respect to such month plus the product of $37.50 multiplied 
by the total number of such recipients, or (ii) 15 per centum 
of the total of the sums expended during such quarter as old- 
age assistance under the State plan in the form of medical or 
any other type of remedial care, not counting so much of 
any expenditure with respect to any month as exceeds the 
product of $7.50 multiplied by the total number of such re- 
cipients of old-age assistance for such month; 

(3) in the case of any State, an amount equal to the Federal 
medical percentage (as defined in section 6(c)) of the total 
amounts expended during such quarter as medical assistance for 
the aged under the State plan (including expenditures for insur- 
ance premiums for medical or any other type of remedial care 
or the cost thereof) ; and 

(4) in the case of any State whose State plan approved under 
section 2 meets the requirements of subsection (c) (1), an amount 
equal to the sum of the following proportions of the total amounts 
expended during such quarter as found necessary by the Secretary 
of Health, Education, and Welfare for the proper and efficient 
administration of the State plan — 

(A) 75 per centum of so much of such expenditures as 
are for — 



Sec. 3(a) 



8 



(i) services which are prescribed pursuant to subsection 
(c) (1) and are provided (in accordance with the next 
sentence) to applicants for or recipients of assistance 
under the plan to help them attain or retain capability 
for self-care, or 

(ii) other services, specified by the Secretary as likely 
to prevent or reduce dependency, so provided to such ap- 
plicants or recipients, or 

(iii) any of the services prescribed pursuant to sub- 
section (c) (1), and of the services specified as provided 
in clause (ii), which the Secretary may specify as appro- 
priate for individuals who, within such period or periods 
as the Secretary may prescribe, have been or are likely 
to become applicants for or recipients of assistance under 
the plan, if such services are requested by such individ- 
uals and are provided to such individuals in accordance 
with the next sentence, or 

(iv) the training (including both short- and long- 
term training at educational institutions through grants 
to such institutions or by direct financial assistance to 
students enrolled in such institutions) of personnel em- 
ployed or preparing for employment by the State agency 
or by the local agency administering the plan in the po- 
litical subdivision ; plus 

(B) one-half of so much of such expenditures (not in- 
cluded under subparagraph (A) ) as are for services provided 
(in accordance with the next sentence) to applicants for or 
recipients of assistance under the plan, and to individuals 
requesting such services who (within such period or periods 
as the Secretaiy may prescribe) have been or are likely to 
become applicants for or recipients of such assistance; plus 

(C) one-half of the remainder of such expenditures. 
The services referred to in subparagraphs (A) and (B) shall, 
except to the extent specified by the Secretary, include only — 

(D) services provided by the staff of the State agency, or 
of the local agency administering the State plan in the politi- 
cal subdivision: Provided, That no funds authorized under 
this title shall be available for services defined as vocational 
rehabilitation services under the Vocational Rehabilitation 
Act (i) which are available to individuals in need of them 
under programs for their rehabilitation carried on under a 
State plan approved under such Act, or (ii) which the State 
agency or agencies administering or supervising the adminis- 
tration of the State plan approved under such Act, are able 



9 



Sec. 3(b) 



and willing to provide if reimbursed for the cost thereof pur- 
suant to agreement under subparagraph (E). if provided by 
such staff, and 

(E) under conditions which shall be prescribed by the 
Secretary, services which in the judgment of the State agency 
cannot be as economically or as effectively provided by the 
staff of such State or local agency and are not otherwise rea- 
sonablv available to individuals in need of them, and which 
are provided, pursuant to agreement with the State agency, 
by the State health authority or the State agency or agencies 
administering or supervising the administration of the State 
plan for vocational rehabilitation services approved under 
the Vocational Rehabilitation Act or by any other State 
agency which the Secretary may determine to be appropri- 
ate (whether provided by its staff or by contract with public 
(local) or nonprofit private agencies) ; 
except that services described in clause (i) of subparagraph (D) 
hereof may be provided only pursuant to agreement with such 
State agency or agencies administering or supervising the admin- 
istration of the State plan for vocational rehabilitation services 
so approved. The portion of the amount expended for adminis- 
tration of the State plan to which subparagraph (A) applies and 
the portion thereof to which subparagraph (B) and (C) apply 
shall be determined in accordance with such methods and pro- 
cedures as may be permitted by the Secretary ; and 

(5) in the case of any State whose State plan approved under 
section 2 does not meet the requirements of subsection (c) (1), an 
amount equal to one-half of the total of the sums expended dur- 
ing such quarter as found necessary by the Secretary for the 
proper and efficient administration of the State plan, including 
services referred to in paragraph (4) and provided in accordance 
with the provisions of such paragraph, 
(b) The method of computing and paying such amounts shall be 
as follows : 

(1) The Secretary of Health, Education, and Welfare shall, 
prior to the beginning of each quarter, estimate the amount to 
be paid to the State for such quarter under the provisions of 
subsection (a), such estimate to be based on (A) a report filed 
by the State containing its estimate of the total sum to be ex- 
pended in such quarter in accordance with the provisions of such 
subsection, and stating the amount appropriated or made avail- 
able by the State and its political subdivisions for such expendi- 
tures in such quarter, and if such amount is less than the State's 
proportionate share of the total sum of such estimated expendi- 



64-310 O - 76 - 2 



Sec. 3(c) 



10 



tures, the source or sources from which the difference is expected 
to be derived, (B) records showing the number of aged individ- 
uals in the State, and (C) such other investigation as the Secre- 
tary may find necessary. 

(2) The Secretary of Health, Education, and Welfare shall 
then certify to the Secretary of the Treasury the amount so 
estimated by the Secretary of Health, Education, and Welfare, 
(A) reduced or increased, as the case may be, by any sum by 
which the Secretary of Health, Education, and Welfare finds that 
his estimate for any prior quarter was greater or less than the 
amount which should have been paid to the State under sub- 
section (a) for such quarter, and (B) reduced by a sum equivalent 
to the pro rata share to which the United States is equitably 
entitled, as determined by the Secretary of Health, Education, 
and Welfare, of the net amount recovered during any prior quar- 
ter by the State or any political subdivision thereof with respect 
to assistance furnished under the State plan; except that such 
increases or reductions shall not be made to the extent that such 
sums have been applied to make the amount certified for any 
prior quarter greater or less than the amount estimated by the 
Secretary of Health, Education, and Welfare for such prior 
quarter : Provided, That any part of the amount recovered from 
the estate of a deceased recipient which is not in excess of the 
amount expended by the State or any political subdivision thereof 
for the funeral expenses of the deceased shall not be considered 
as a basis for reduction under clause (B) of this paragraph. 

(3) The Secretary of the Treasury shall thereupon, through 
the Fiscal Service of the Treasury Department and prior to audit 
or settlement by the General Accounting Office, pay to the State, 
at the time or times fixed by the Secretary of Health, Education, 
and Welfare, the amounts so certified. 

(c) (1) In order for a State to qualify for payments under para- 
graph (4) of subsection (a), its State plan approved under section 2 
must provide that the State agency shall make available to applicants 
for recipients of old-age assistance under such State plan at least those 
services to help them attain or retain capability for self-care which are 
prescribed by the Secretary. 

(2) In the case of any State whose State plan included a provision 
meeting the requirements of paragraph (1), but with respect to which 
the Secretary finds, after reasonable notice and opportunity for hear- 
ing to the State agency administering or supervising the administra- 
tion of such plan, that — 

(A) the provision has been so changed that it no longer com- 
plies with the requirements of paragraph (1) , or 



11 



Sec. 4 



(B) in the administration of the plan there is a failure to com- 
ply substantially with such provision, i 
the Secretary shall notify such State agency that further payments 
will not be made to the State under paragraph (4) of subsection (a) 
until he is satisfied that there will no longer be any such failure to 
comply. Until the Secretary is so satisfied further payments with re- 
spect to the administration of such State plan shall not be made under 
paragraph (4) of subsection (a) but shall instead be made, subject to 
the other provisions of this title, under paragraph (5) of such sub- 
section. 

(d) Notwithstanding the preceding provisions of this section, the 
amount determined under such provisions for any State for any quar- 
ter which is attributable to expenditures with respect to patients in 
institutions for mental diseases shall be paid only to the extent that 
the State make a showing satisfactory to the Secretary that total ex- 
penditures in the State from Federal, State, and local sources for 
mental health services (including payments to or in behalf of individ- 
uals with mental health problems) under State and local public health 
and public welfare programs for such quarter exceed the average of 
the total expenditures in the State from such sources for such services 
under such programs for each quarter of the fiscal year ending June 30, 
1965. For purposes of this subsection, expenditures for such services 
for each quarter in the fiscal year ending June 30, 1965, in the case 
of any State shall be determined on the basis of the latest data, satis- 
factory to the Secretary, available to him at the time of the first de- 
termination by him under this subsection for such State ; and expendi- 
tures for such services for any quarter beginning after December 31, 
1965, in the case of any State shall be determined on the basis of the 
latest data, satisfactory to the Secretary, available to him at the time 
of the determination under this subsection for such State for such 
quarter ; and determinations so made shall be conclusive for purposes 
of this subsection. 

Operation of State Plans 

Sec. 4. In the case of any State plan which has been approved under 
this title by the Secretary of Health, Education, and Welfare, if the 
Secretary, after reasonable notice and opportunity for hearing to the 
State agency administering or supervising the administration of such 
plan finds — 

(1) that the plan has been so changed as to impose any age, 
residence, or citizenship requirement prohibited by section 2(b), 
or that in the administration of the plan any such prohibited re- 
quirement is imposed, with the knowledge of such State agency, 
in a substantial number of cases ; or 



Sec. 5 



12 



(2) that in the administration of the plan there is a failure to 
comply substantially with any provision required by section 2(a) 
to be included in the plan ; 
the Secretary shall notify such State agency that further payments 
will not be made to the State (or, in his discretion, that payments will 
be limited to categories under or parts of the State plan not affected 
by such failure) until the Secretary is satisfied that such prohibited 
requirement is no longer imposed, and that there is no longer any such 
failure to comply. Until he is so satisfied he shall make no further 
payments to such State (or shall limit payments to categories under 
or parts of the State plan not affected by such failure). 

Administration 

Sec. 5. [Executed. Authorized appropriation for administrative 
expenses of the Social Security Board under this title for the fiscal year 
ending June 30, 1936.] 

Definitions 

Sec. 6. (a) For the purposes of this title, the term "old-age assist- 
ance" means money payments to, or (if provided in or after the third 
month before the month in which the recipient makes application for 
assistance) medical care in behalf of or any type of remedial care 
recognized under State law in behalf of, needy individuals who are 
sixty-five years of age or older, but does not include any such pay- 
ments to or care in behalf of any individual who is an inmate of a 
public institution (except as a patient in a medical institution). Such 
term also includes payments which are not included within the mean- 
ing of such term under the preceding sentence, but which would be so 
included except that they are made on behalf of such a needy indi- 
vidual to another individual who (as determined in accordance with 
standards prescribed by the Secretary) is interested in or concerned 
with the welfare of such needy individual, but only with respect to a 
State whose State plan approved under section 2 includes provision 
for— 

(1) determination by the State agency that such needy indi- 
vidual has, by reason of his physical or mental condition, such 
inability to manage funds that making payments to him would 
be contrary to his welfare and, therefore, it is necessary to provide 
such assistance through payments described in this sentence; 

(2) making such payments only on cases in which such pay- 
ments will, under the rules otherwise applicable under the State 
plan for determining need and the amount of old-age assistance to 
be paid (and in conjunction with other income and resources), 



13 



Sec. 6(b) 



meet all the need of the individuals with respect to whom such 
payments are made ; 

(3) undertaking and continuing special efforts to protect the 
welfare of such individual and to improve, to the extent possible, 
his capacity for self -care and to manage funds ; 

(4) periodic review by such State agency of the determination 
under paragraph (1) to ascertain whether conditions justifying 
such determination still exist, with provision for termination of 
such payments if they do not and for seeking judicial appointment 
of a guardian or other legal representative, as described in section 
1111, if and when it appears that such action will best serve the 
interests of such needy individual ; and 

(5) opportunity for a fair hearing before the State agency on 
the determination referred to in paragraph ( 1 ) for any individual 
with respect to whom it is made. 

At the option of a State (if its plan approved under this title so pro- 
vides), such term (i) need not include money payments to an individ- 
ual who has been absent from such State for a period in excess of 90 
consecutive days (regardless of whether he has maintained his resi- 
dence in such State during such period) until he has been present in 
such State for 30 consecutive days in the case of such an individual who 
has maintained his residence in such State during such period or 90 
consecutive days in the case of any other such individual, and (ii) 
may include rent payments made directly to a public housing agency 
on behalf of a recipient or a group or groups of recipients of assist- 
ance under such plan. 

(b) For purposes of this title, the term "medical assistance for the 
aged'' means payment of part or all of the cost of the following care 
and services (if provided in or after the third month before the month 
in which the recipient makes application for assistance) for individ- 
uals sixty-five years of age or older who are not recipients of old-age 
assistance (except, for any month, for recipients of old-age assistance 
who are admitted to or discharged from a medical institution during 
such month) but whose income and resources are insufficient to meet 
all of such cost — 

(1) inpatient hospital services ; 

(2) skilled nursing-home services; 

(3) physicians' services; 

(4) outpatient hospital or clinic services; 

(5) home health care services ; 

(6) private duty nursing services ; 

(7) physical therapy and related services ; 

( 8 ) dental services ; 



Sec. 6(c) 



14 



(9) laboratory and X-ray services; 

(10) prescribed drugs, eyeglasses, dentures, and prosthetic de- 
vices ; 

(11) diagnostic, screening, and preventive services; and 

(12) any other medical care or remedial care recognized under 
State law ; 

except that such term does not include any such payments with respect 
to care or services for any individual who is an inmate of a public 
institution (except as a patient in a medical institution) . 

(c) For purposes of this title, the term "Federal medical percent- 
age" for any State shall be 100 per centum less the State percentage ; 
and the State percentage shall be that percentage which bears the same 
ratio to 50 per centum as the square of the per capita income of such 
State bears to the square of the per capita income of the continental 
United States (including Alaska) and Hawaii; except that (i) the 
Federal medical percentage shall in no case be less than 50 per centum 
or more than 80 per centum, and (ii) the Federal medical percentage 
for Puerto Rico, the Virgin Islands, and Guam shall be 50 per centum. 
The Federal medical percentage for any State shall be determined and 
promulgated in accordance with the provisions of subparagraph (B) 
of section 1101(a) (8) (other than the proviso at the end thereof) ; 
except that the Secretary shall, as soon as possible after enactment of 
the Social Security Amendments of 1960, determine and promulgate 
the Federal medical percentage for each State — 

(1) for the period beginning October 1, 1960, and ending with 
the close of June 30, 1961, which promulgation shall be based on 
the same data with respect to per capita income as the data used 
by the Secretary in promulgating the Federal percentage (under 
section 1101(a)(8)) for such State for the fiscal year ending 
June 30, 1961 (which promulgation of the Federal medical per- 
centage shall be conclusive for such period), and 

(2) for the period beginning July 1, 1961, and ending with 
the close of June 30, 1963, which promulgation shall be based on 
the same data with respect to per capita income as the data used 
by the Secretary in promulgating the Federal percentage (under 
section 1101(a) (8)) for such State for such period (which pro- 
mulgation of the Federal medical percentage shall be conclusive 
for such period). 



TITLE II— FEDERAL OLD-AGE, SURVIVORS, AND DIS- 
ABILITY INSURANCE BENEFITS 

Sec. 201. Federal Old-Age and Survivors Insurance Trust Fund and Page 1 

Federal Disability Insurance Trust Fund 20 

(a) Creation of Federal Old- Age and Survivors Insurance Trust 

Fund 20 

(b) Creation of Federal Disability Insurance Trust Fund 21 

(c) Board of Trustees 23 

(d) Investment of Funds 24 

(e) Sale of Obligations 24 

(f ) Crediting of Interest on and Proceeds From Sales of Obligations. 24 

(g) Payment From Trust Funds Into Treasury 25 

(h) Trust Funds Used for Payments of Benefits 27 

(i) Acceptance of Gifts 27 

Sec. 202. Old-Age and Survivors Insurance Benefit Payments 28 

(a) Old-Age Insurance Benefits 28 

(b) Wife's Insurance Benefits 28 

(c) Husband's Insurance Benefits 29 

(d) Child's Insurance Benefits 30 

(e) Widow's Insurance Benefits 36 

(f ) Widower's Insurance Benefits 38 

(g) Mother's Insurance Benefits . 42 

(h) Parent's Insurance Benefits 43 

(i) Lump-sum Death Payments 45 

(j) Application for Monthly Insurance Benefits; Retroactive Effect 

of Application ; Waiver of Entitlement 46 

(k) Simultaneous Entitlement to More Than One Type of Insurance 

Benefit 47 

(1) Effect of Entitlement to Survivor Benefits Under Railroad Re- 
tirement Act 49 

(m) Minimum Survivor's Benefit — 49 

(n) Termination of Benefits Upon Deportation of Primary Bene- 
ficiary 50 

(o) Application for Benefits by Survivors of Members and Former 

Members of the Uniformed Services 50 

(p) Extension of Period for Filing Proof of Support and Applica- 
tions for Lump-Sum Death Payment 51 

(q) Reduction of Benefit Amounts for Certain Beneficiaries 51 

(r) Presumed Filing of Application by Individuals Eligible for Old- 
Age Insurance Benefits and for Wife's or Husband's Insurance 

Benefits 57 

(s) Child Aged 18 or Over Attending School 57 

(t) Suspension of Benefits of Aliens Who Are Outside the United 

States 58 

(u) Effect of Conviction of Subversive Activities, etc 60 

(v) Waiver of Benefits 61 

(w) Increase in Old-Age Insurance Benefit Amounts on Account of 

Delayed Retirement 61 

Sec 203. Reduction of Insurance Benefits 62 

(a) Maximum Benefits Payable 62 

(b) Deductions on Account of Work 65 

(c) Deductions on Account of Noncovered Work Outside the U.S. ; 

Failure To Have Child in Care 66 



1 This table of contents does not appear in the law. 

(15) 



16 



Sec. 203. Reduction of Insurance Benefits — Contined 

(d) Deductions From Dependents' Benefits on Account of Old- Age Page 



Insurance Beneficiary's Noncovered Work Outside the U.S 67 

(e) Occurrence of More Than One Event 07 

(f) Months to Which Earnings Are Charged 68 

(g) Penalty for Failure To Report Certain Events 72 

(h) Reuort of Earnings to Secretary 73 

(i) Circumstances Under Which Deductions and Reductions Not 

Required 75 

(j) Attainment of Age 72 75 

(k) Noncovered Remunerative Activity Outside the United States 75 

(1) Good Cause for Failure To Make Reports Required 76 

Sec. 204. Overpayments and Underpayments 76 

(a) Adjustment of Errors in Payments 76 

(b) When Adjustment or Recovery of Overpayment Not Made 76 

(c) Nonliability of Certifying or Disbursing Officer 76 

(d) Special Rules Regarding Underpayments 77 

Sec. 205. Evidence, Procedure, and Certification for Payment 78 

(a) Authority of Secretary To Make Rules and Regulations To Carry 

Out Provisions of Title II 78 

(b) Decisions by Secretary Regarding Rights of Claimants 78 

(c) Earnings Records Maintained by Secretary; Time Limitation for 

Revisions 78 

(d) Authority of Secretary To Issue Subpenas 83 

(e) Contumacy or Failure To Obey Subpena 83 

(f) [Repealed.] 

(g) Review of Secretary's Decision by Court 83 

(h) Finality of Secretary's Decision 84 

(i) Certification by Secretary for Payment 84 

(j) Authority of Secretary To Certify Payment of Benefits to Some- 
one Other Than the Beneficiary 85 

(k) Settlement of Claims of Incompetents 85 

(1) Authority of Secretary To Delegate Powers 85 

(m) [Repealed.] 

(n) Joint Payment of Benefits 85 

(o) Crediting of Compensation Under the Railroad Retirement Act 86 

(p) Special Rules in Case of Federal Service 86 

(q) Expedited Benefit Payments 87 

Sec. 206. Representation of Claimants 88 

(a) Representation Before Secretary; Fees for Services Before 

Secretary 88 

(b) Court Determination of Fees in Certain Cases 89 

Sec. 207. Assignment 90 

Sec. 208. Penalties 90 

(a) False Statements To Obtain Increase in Benefits 90 

(b) False Statements on Applications 91 

(c) False Statements Made for Use in Determining Rights to 

Payments 91 

(d) Fraudulent Concealment or Failure To Disclose Events Affecting 

Initial or Continued Right to Payment 91 

(e) Willful Conversion of Benefits by Representative Payee 91 

(f ) Furnishing False Information To Obtain Social Security Account 

Number 91 

(g) Penalty for Furnishing False Social Security Number With In- 

tent To Deceive 91 

Sec. 209. Definition of Wages 92 

(a) Remuneration Excluded 92 

(b) Payments Under Plan or System Excluded 93 

(c) Retirement Pay Excluded 93 

fd) Sick Pay Excluded 93 

(e) Payments to or by Trust Exempt From Tax Under Internal 

Revenue Code Excluded 93 

(f) Payment of Employee Tax by Employer Excluded 94 

(g) Payments in Kind and Certain Cash Payments for Domestic 

Employment or Employment Not in Course of Employer's 

Trado of Buriness Excluded 94 



17 



Sec. 209. Definition of Wages— Continued Page 

(h) Remuneration for Agricultural Labor — When Excluded 94 

(i) Remuneration Paid After Retirement Age — When Excluded 94 

(j) Remuneration Paid to Homeworkers — When Excluded 95 

(k) Moving Expenses of Employees 95 

(1) Tips 95 

(m) Payments by Employer Upon or After Termination of 

Employment 95 

(n) Payments by Employer to Survivor of Estate of Former Em- 
ployee 95 

(0) Payments to Employee Entitled to Disability Insurance Benefits- 95 
Sec 210. Employment 96 

(a) Employment; Excluded Employment Defined 96 

(b) Included and Excluded Service Performed During Pay Period— 103 

(c) American Vessel Defined 104 

(d) American Aircraft Defined 104 

(e) American Employer Defined 104 

(f ) Agricultural Labor Defined 104 

(g) Farm Defined 105 

(h) State Defined 105 

(1) United States Defined 105 

(j) Employee Defined 105 

(k) Covered Transportation Service Defined 106 

(1) Service in the Uniformed Services Defined 108 

(m) Member of a Uniformed Service Defined 109 

(n) Crew Leader Defined 110 

(0) Peace Corps Volunteer Service 110 

Sec 211. Self-Employment 110 

(a) Net Earnings From Self -Employment Defined 110 

(b) Self -Employment Income Defined 114 

(c) Trade or Business Defined 115 

(d) Partnership and Partner Defined 117 

(e) Taxable Year Defined 117 

(f) Computing Deceased's Net Earnings From Self -Employment 

When Partnership Taxable Year Ends Because of Death 117 

(g) Regular Basis _ 117 

Sec 212. Crediting of Self-Employment Income to Calendar Quarters 118 

(a) Calendar Taxable Year 118 

(b) Taxable Year Other Than a Calendar Year 118 

Sec 213. Quarter and Quarter of Coverage 118 

(a) Definitions 118 

(b) Crediting of Wages Paid in 1937 120 

(c) Alternative Method for Determining Quarters of Coverage for 

1937 to 1950 120 

Sec 214. Insured Status for Purposes of Old-Age and Survivors Insurance 

Benefits 121 

(a) Fully Insured Individual 121 

(b) Currently Insured Individual 121 

Sec 215. Computation of Primary Insurance Amount 122 

(a) Primary Insurance Amount 122 

(b) Average Monthly Wage 128 

(c) Primary Insurance Amount Under Prior Provisions 129 

(d) Primary Insurance Benefit Under 1939 Act 130 

(e) Certain Wages and Self -Employment Income Not To Be 

Counted 131 

(f ) Recomputation of Benefits 131 

(g) Rounding of Benefits 133 

(h) Exclusion Under Certain Circumstances of Remuneration Paid 

to Public Health Service Reserve Officer for Service Prior to 

July I, 1960 133 

(1) Cost-of- Living Increases in Benefits 134 

Sec 216. Other Definitions 137 

(a) [Repealed.] 

(b) Wife 137 

(c) Widow 137 

(d) Divorced Wives, Divorce 137 



18 



Sec. 216. Other Definitions — Continued Page 

(e) Child 138 

(f) Husband 139 

(g) Widower 139 

(h) Determination of Status as Wife, Husband, Widow, Widower, 

Child, or Parent 140 

(j) Disability : Period of Disability 143 

(j) When Periods of Limitation End on Nonwork Days 146 

(k) Waiver of 9-Month Requirement for Widow, Stepchild, or 
Widower in Certain Death Cases, or in the Case of Remarriage 

to the Same Individual 146 

Sec. 217. Benefits in Case of Veterans 147 

(a) Wage Credits for World War II Service 147 

(b) Insured Status of World War II Veterans Dying Within 3 Years 

After Separation From Active Service 148 

(c) Time for Parent of Deceased Veteran To File Proof of Support 149 

(d) Definition of World War II and World War II Veteran 150 

(e) Wage Credits for Military Service After World War II 150 

(f) Waiver of Rights to Civil Service Retirement Annuity by Widow 

or Child as Condition of Entitlement to Social Security Benefits- 152 

(g) Reimbursement of Trust Fund for Cost of Wage Credits for 

Certain Military Service 152 

(h) Wage Credits for American Citizen's World War II Service in 

Armed Forces of U.S. Allies 153 

Sec. 218. Voluntary Agreements for Coverage of State and Local Em- 
ployees 154 

(a) Purpose of Agreement 154 

(b) Definitions of Terms 154 

(c) Services Covered 155 

(d) Positions Covered by Retirement Systems 157 

(e) Payments and Reports by States 163 

(f) Effective Date of Agreement 164 

(g) Termination of Agreement 165 

(h) Deposits in Trust Fund ; Adjustments 166 

(i) Purpose of Regulations Issued Under This Section 166 

(j) Result of State Failure To Make Payments Required Under 

Agreement 167 

(k) Instrumentalities of Two or More States 167 

(1) Delegation of Functions 168 

(m) Wisconsin Retirement Fund 169 

(n) Modification of Agreement To Apply to Certain Positions No 

Longer Covered by Retirement Systems 169 

(o) Modification of Agreement To Apply to Certain Employees of the 

State of Utah 169 

(p) Modification of Agreement To Apply to Policemen and Firemen 

in Certain States I 70 

(q) Time Limitation on Assessments 171 

(r) Time Limitation on Credits and Refunds 173 

(s) Review by Secretary of Assessment; Allowance or Disallowance 

of Claim for Credit or Refunds 173 

(t) Review by Court 174 

(u) Positions Compensated Solely on a Fee Basis 174 

Sec 219. [Repealed.] 

Sec 220. Disability Provisions Inapplicable if Benefit Rights Impaired-— 175 

Sec 221. Disability Determinations 175 

(a) Disability Determination To Be Made by State Agency 175 

(b) Federal-State Agreements 175 

(c) Review by Secretary on His Own Motion of Disability Deter- 

minations Made by State J76 

(d) Individual Dissatisfied by Determination Entitled to Hearing 176 

(e) Reimbursement of States for Cost of Carrying Out Federal-State 

Agreements 

(f ) Use of Payments by States 1^6 

(g) Disability Determinations Made by Secretary 1<6 

Sec 222. Rehabilitation Services 17< 

(a) Referral for Rehabilitation Services 17' 



19 



Sec 222. Rehabilitation Services — Continued 

(b) Deductions on Account of Refusal To Accept Rehabilitation page 



Services 177 

(c) Period of Trial Work 178 

(d) Costs of Rehabilitation Services From Trust Funds 179 

Sec. 223. Disability Insurance Benefit Payments 181 

(a) Disability Insurance Benefits 181 

(b) Filing of Application 182 

(c) Definitions of Insured Status and Waiting Period 182 

(d) Definition of Disability 183 

Sec 224. Reduction of Benefits Based on Disability on Account of Re- 
ceipt of Workmen's Compensation 184 

(a) Computation of Reduction 184 

(b) Benefit Payable on Other Than a Monthly Basis 185 

(c) Application When Other Reduction or Deduction Under this 

Title Applicable 186 

(d) No Reduction if Workmen's Compensation Benefit Reduced 

Because of Receipt of Title II Benefits 186 

(e) Certification by Individual as to Award or Possibility of Award 

of Workmen's Compensation Benefits 186 

(f ) Redetermination of Reduction 186 

(g) Reduction of Auxiliary Benefits Before Reduction of Disability 

Insurance Benefit 187 

Sec 225. Suspension of Benefits Based on Disability 187 

Sec 226. Entitlement to Hospital Insurance Benefits 188 

(a) Requirements for Entitlement — Individual over 65 188 

(b) Requirements for Entitlement — Individual under 65 188 

(c) Limitations — Deemed Entitlement 188 

(d) Qualified Railroad Retirement Beneficiary — Definition 189 

(e) Chronic Renal Disease Considered to Constitute Disability 189 

(f) Medicare Eligibility on Basis of Chronic Kidney Failure 190 

(g) Secretary's Authority to Limit Reimbursement 190 

(h) Widows' and Widowers' Hospital Benefits 190 

(i) Uninsured Individuals 191 

Sec 227. Transitional Insured Status 191 

(a) Benefit Rate 191 

(b) Widow's Benefits — Individual Deceased Prior to Becoming 

Eligible Under Transitional Insured Status Provisions 191 

(c) Widow's Benefits — Individual Deceased After Becoming Eligible 

Under Transitional Insured Status Provisions 191 

Sec 228. Benefits at Age 72 for Certain Uninsured Individuals 192 

(a) Eligibility 192 

(b) Benefit Amount 192 

(c) Reduction for Governmental Pension System Benefits 192 

(d) Suspension for Months in Which Cash Payments Are Made 

Under Public Assistance 194 

(e) Suspension Where Individual Is Residing Outside the United 

States 194 

(f) Treatment as Monthly Insurance Benefits 195 

(g) Annual Reimbursement of Federal Old-Age and Survivors 

Insurance Trust Fund 195 

(h) Definitions 195 

Sec 229. Benefits in Case of Members of Uniformed Services 196 

(a) Deemed Wage Credits for Service after December 1967 196 

(b) Appropriations to Cover Wage Credits 196 

Sec. 230. Adjustment of the Contribution and Benefit Base 196 

(a) Publication in the Federal Register 196 

(b) The amount of the contribution and benefit base 196 

(c) Interim contribution and benefit base 197 

Sec 231. Benefits in Case of Certain Individuals Interned During World 

War II 197 

(a) Definition of Internee 197 

(b) Wages 198 

(c) Appropriations 199 

Sec 232. Processing of tax data 199 



Sec. 201(a) 



20 



Federal Old-Age and Survivors Insurance Trust Fund and 
Federal Disability Insurance Trust Fund 

Section 201. (a) There is hereby created on the books of the Treas- 
ury of the United States a trust fund to be known as the "Federal 
Old- Age and Survivors Insurance Trust Fund". The Federal Old-Age 
and Survivors Insurance Trust Fund shall consist of the securities 
held by the Secretary of the Treasury for the Old-Age Reserve Ac- 
count and the amount standing to the credit of the Old-Age Reserve 
Account on the books of the Treasury on January 1, 1940, which se- 
curities and amount the Secretary of the Treasury is authorized and 
directed to transfer to the Federal Old-Age and Survivors Insurance 
Trust Fund, and, in addition, such gifts and bequests as may be made 
as provided in subsection (i)(l), and such amounts as may be ap- 
propriated to, or deposited in, the Federal Old- Age and Survivors In- 
surance Trust Fund as hereinafter provided. There is hereby appro- 
priated to the Federal Old-Age and Survivors Insurance Trust Fund 
for the fiscal year ending June 30, 1941, and for each fiscal year there- 
after, out of any moneys in the Treasury not otherwise appropriated, 
amounts equivalent to 100 per centum of — 

(1) the taxes (including interest, penalties, and additions to 
the taxes) received under subchapter A of chapter 9 of the In- 
ternal Revenue Code of 1939 (and covered into the Treasury) 
which are deposited into the Treasury by collectors of internal 
revenue before January 1, 1951 ; and 

(2) the taxes certified each month by the Commissioner of 
Internal Revenue as taxes received under subchapter A of chapter 
9 of such Code which are deposited into the Treasury by collectors 
of internal revenue after December 31, 1950, and before January 
1, 1953, with respect to assessments of such taxes made before 
January 1, 1951 ; and 

(3) the taxes imposed by subchapter A of chapter 9 of such 
Code with respect to wages (as defined in section 1426 of such 
Code), and by chapter 21 (other than sections 3101(b) and 3111 
(b) ) of the Internal Revenue Code of 1954 with respect to wages 
(as defined in section 3121 of such Code) reported to the Com- 
missioner of Internal Revenue pursuant to section 1420(c) of the 
Internal Revenue Code of 1939 after December 31, 1950, or to 
the Secretary of the Treasury or his delegates pursuant to sub- 
title F of the Internal Revenue Code of 1954 after December 31, 
1954, as determined by the Secretary of the Treasury by apply- 
ing the applicable rates of tax under such subchapter or chapter 
21 (other than sections 3101(b) and 3111(b)) to such wages, 
which wages shall be certified by the Secretary of Health, Educa- 
tion, and Welfare on the basis of the records of wages established 



21 



Sec. 201(b) 



and maintained by such Secretary in accordance with such re- 
ports, less the amounts specified in clause (1) of subsection (b) of 
this section ; and 

(4) the taxes imposed by subchapter E of chapter 1 of the 
Internal Revenue Code of 1939, with respect to self -employment 
income (as defined in section 481 of such Code), and by chapter 
2 (other than section 1401(b)) of the Internal Revenue Code of 
1954 with respect to self -employment income (as defined in section 
1402 of such Code) reported to the Commissioner of Internal 
Revenue on tax returns under such subchapter or to the Secretary 
of the Treasury, or his delegate on tax returns under subtitle F 
of such Code, as determined by the Secretary of the Treasury by 
applying the applicable rate of tax under such subchapter or 
chapter (other than section 1401(b)) to such self -employment 
income, which self-employment income shall be certified by the 
Secretary of Health, Education, and Welfare on the basis of the 
records of self -employment income established and maintained by 
the Secretary of Health, Education, and Welfare in accordance 
with such returns, less the amounts specified in clause (2) of sub- 
section (b) of this section. 
The amounts appropriated by clauses (3) and (4) shall be transferred 
from time to time from the general fund in the Treasury to the Fed- 
eral Old-Age and Survivors Insurance Trust Fund, and the amounts 
appropriated by clauses (1) and (2) of subsection (b) shall be trans- 
ferred from time to time from the general fund in the Treasury to the 
Federal Disability Insurance Trust Fund, such amounts to be deter- 
mined on the basis of estimates by the Secretary of the Treasury of the 
taxes, specified in clauses (3) and (4) of this subsection, paid to or de- 
posited into the Treasury; and proper adjustments shall be made in 
amounts subsequently transferred to the extent prior estimates were 
in excess of or were less than the taxes specified in such clauses (3) and 
(4) of this subsection. 

(b) There is hereby created on the books of the Treasury of the 
United States a trust fund to be known as the "Federal Disability In- 
surance Trust Fund". The Federal Disability Insurance Trust Fund 
shall consist of such gifts and bequests as may be made as provided in 
subsection (i) (1), and of such amounts as may be appropriated to, or 
deposited in, such fund as provided in this section. There is hereby 
appropriated to the Federal Disability Insurance Trust Fund for the 
fiscal year ending June 30, 1957, and for each fiscal year thereafter, out 
of any moneys in the Treasury not otherwise appropriated, amounts 
equivalent to 100 per centum of — 

(1)(A) y 2 of 1 per centum of the wages (as defined in section 
3121 of the Internal Revenue Code of 1954) paid after Decern- 



Sec. 201(b) 



22 



ber 31, 1956, and before January 1, 1966, and reported to the Sec- 
retary of the Treasury or his delegate pursuant to subtitle F of 
the Internal Revenue Code of 1954, (B) 0.70 of 1 per centum of 
the wages (as so defined) paid after December 31. 1965, and be- 
fore January 1, 1968, and so reported, and (C) 0.95 of 1 per 
centum of the wages (as so defined) paid after December 31, 
1967, and before January 1, 1970, and so reported, (D) 1.10 per 
centum of the wages (as so defined) paid after December 31, 
1969, and before January 1, 1973, and so reported, (E) 1.1 per 
centum of the wages (as so defined) paid after December 31, 

1972, and before January 1, 1974, and so reported, (F) 1.15 per 
centum of the wages (as so defined) paid after December 31, 1973, 
and before January 1, 1978, and so reported, (G) 1.2 per centum 
of the wages (as so defined) paid after December 31, 1977, and 
before January 1, 1981, and so reported, (H) 1.3 per centum of the 
wages (as so denned) paid after December 31, 1980, and before 
January 1, 1986 and so reported, (I) 1.4 per centum of the wages 
(as so defined) paid after December 31, 1985, and before January 
1, 2011, and so reported, and (J) 1.7 per centum of the wages 
(as so defined) paid after December 31, 2010, and so reported, 
which wages shall be certified by the Secretary of Health, Educa- 
tion, and Welfare on the basis of the records of wages established 
and maintained by such Secretary in accordance with such 
reports ; and 

(2) (A) % of 1 per centum of the amount of self -employment 
income (as defined in section 1402 of the Internal Revenue Code 
of 1954) reported to the Secretary of the Treasury or his delegate 
on tax returns under subtitle F of the Internal Revenue Code of 
1954 for any taxable year beginning after December 31, 1956, and 
before January 1, 1966, (B) and 0.525 of 1 per centum of the 
amount of self -employment income (as so defined) so reported for 
any taxable year beginning after December 31, 1965, and before 
January 1, 1968, and (C) 0.7125 of 1 per centum of the amount of 
self -employment income (as so defined) so reported for any tax- 
able year beginning after December 31, 1967, and before Janu- 
ary 1, 1970, (D) 0.825 of 1 per centum of the amount of self- 
employment income (as so defined) so reported for any taxable 
year beginning after December 31, 1969, and before January 1, 

1973, (E) 0.795 of 1 per centum of the amount of self -employ- 
ment income (as so defined) so reported for any taxable year 
beginning after December 31, 1972, and before January 1, 1974, 
(F) 0.815 of 1 per centum of the amount of self -employment 
income (as so defined) as reported for any taxable year beginning 
after December 31, 1973, and before January 1, 1978, (G) 0.850 
of 1 per centum of t ho amount of self -employment income (as so 



23 



Sec. 201(c) 



defined) so reported for any taxable year beginning after Decem- 
ber 31, 1977, and before January 1, 1981, (H) 0.920 of 1 per cen- 
tum of the amount of self -employment income (as so defined) so 
reported for any taxable year beginning after December 31, 1980, 
and before January 1, 1986, (I) 0.990 of 1 per centum of the 
amount of self -employment income (as so defined) so reported for 
any taxable year beginning after December 31, 1985, and before 
January 1, 2011, and (J) 1 per centum of the amount of self- 
employment income (as so defined) so reported for any taxable 
year beginning after December 31, 2010, which self-employment 
income shall be certified by the Secretary of Health, Education, 
and Welfare on the basis of the records of self -employment in- 
come established and maintained by the Secretary of Health, 
Education, and Welfare in accordance with such returns, 
(c) With respect to the Federal Old- Age and Survivors Insurance 
Trust Fund and the Federal Disability Insurance Trust Fund (here- 
inafter in this title called the "Trust Funds") there is hereby created 
a body to be known as the Board of Trustees of the Trust Funds (here- 
inafter in this title called the "Board of Trustees") which Board of 
Trustees shall be composed of the Secretary of the Treasury, the Sec- 
retary of Labor, and the Secretary of Health, Education, and Welfare, 
all ex officio. The Secretary of the Treasury shall be the Managing 
Trustee of the Board of Trustees (hereinafter in this title called the 
"Managing Trustee"). The Commissioner of Social Security shall 
serve as Secretary of the Board of Trustees. Such Board of Trustees 
shall meet not less frequently than once each calendar year. It shall be 
the duty of the Board of Trustees to — 

( 1 ) Hold the Trust Funds ; 

(2) Report to the Congress not later than the first day of April 
of each year on the operation and status of the Trust Funds dur- 
ing the preceding fiscal year and on their expected operation and 
status during the next ensuing five fiscal years ; 

(3) Report immediately to the Congress whenever the Board 
of Trustees is of the opinion that the amount of either of the Trust 
Funds is unduly small ; 

(4) Recommend improvements in administrative procedures 
and policies designed to effectuate the proper coordination of the 
old-age and survivors insurance and Federal-State unemploy- 
ment compensation program ; and 

(5) Review the general policies followed in managing the Trust 
Funds, and recommend changes in such policies, including neces- 
sary changes in the provisions of the law which govern the way in 
which the Trust Funds are to be managed. 

The report provided for in paragraph (2) above shall include a state- 
ment of the assets of, and the disbursements made from, the Trust 



Sec. 201(d) 



24 



Funds during the preceding fiscal year, an estimate of the expected 
future income to, and disbursements to be made from, the Trust Funds 
during each of the next ensuing five fiscal years, and a statement of the 
actuarial status of the Trust Funds. Such report shall also include an 
actuarial analysis of the benefit disbursements made from the Federal 
Old-Age and Survivors Insurance Trust Fund with respect to disabled 
beneficiaries. Such report shall be printed as a House document of the 
session of the Congress to which the report is made. 

(d) It shall be the duty of the Managing Trustee to invest such 
portion of the Trust Funds as is not, in his judgment, required to meet 
current withdrawals. Such investments may be made only in interest- 
bearing obligations of the United States or in obligations guaranteed 
as to both principal and interest by the United States. For such pur- 
pose such obligations may be acquired (1) on original issue at the issue 
price, or (2) by purchase of outstanding obligations at the market 
price. The purposes for which obligations of the United States may be 
issued under the Second Liberty Bond Act, as amended, are hereby 
extended to authorize the issuance at par of public-debt obligations for 
purchase by the Trust Funds. Such obligations issued for purchase by 
the Trust Funds shall have maturities fixed with due regard for the 
needs of the Trust Funds and shall bear interest at a rate equal to the 
average market yield (computed by the Managing Trustee on the basis 
of market quotations as of the end of the calendar month next preced- 
ing the date of such issue) on all marketable interest-bearing obliga- 
tions of the United States then forming a part of the public debt 
which are not due or callable until after the expiration of four years 
from the end of such calendar month ; except that where such average 
market yield is not a multiple of one-eighth of 1 per centum, the rate 
of interest of such obligations shall be the multiple of one-eighth of 
1 per centum nearest such market yield. The Managing Trustee may 
purchase other interest-bearing obligations of the United States or 
obligations guaranteed as to both principal and interest by the United 
States, on original issue or at the market price, only where he deter- 
mines that the purchase of such other obligations is in the public 
interest. 

(e) Any obligation acquired by the Trust Funds (except public- 
debt obligations issued exclusively to the Trust Funds) may be sold 
by the Managing Trustee at the market price, and such public-debt 
obligations may be redeemed at par plus accrued interest. 

(f ) The interest on. and the proceeds from the sale or redemption 
of, any obligations held in the Federal Old- Age and Survivors Insur- 
ance Trust Fund and the Federal Disability Insurance Trust Fund 
shall be credited to and form a part of the Federal Old-Age and 
Survivors Insurance Trust Fund and the Disability Insurance Trust 
Fund, respectively. 



25 



Sec. 201(g) 



(g)(1) (A) The Managing Trustee of the Trust Funds (which for 
purposes of this paragraph shall include also the Federal Hospital 
Insurance Trust Fund and the Federal Supplementary Medical Insur- 
ance Trust Fund established by title XVIII) is directed to pay from 
the Trust Funds into the Treasury — 

(i) the amounts estimated by him and the Secretary of Health, 
Education, and Welfare which will be expended, out of moneys 
appropriated from the general fund in the Treasury, during a 
three-month period by the Department of Health, Education, and 
Welfare and the Treasury Department for the administration of 
titles II, XVI, and XVIII of this Act and subchapter E of chap- 
ter 1 and subchapter A of chapter 9 of the Internal Revenue Code 
of 1939, and chapters 2 and 21 of the Internal Revenue Code of 
1954, less 

(ii) the amounts estimated (pursuant to the method prescribed 
by the Board of Trustees under paragraph (4) of this subsection) 
by the Secretary of Health, Education, and Welfare which will 
be expended, out of moneys made available for expenditures from 
the Trust Funds, during such three-month period to cover the cost 
of carrying out the functions of the Department of Health, Educa- 
tion, and Welfare, specified in section 232, which relate to the ad- 
ministration of provisions of the Internal Revenue Code of 1954 
other than those referred to in clause (i) . 

Such payments shall be carried into the Treasury as the net amount of 
repayments due the general fund account for reimbursement of ex- 
penses incurred in connection with the administration of titles II, XVI, 
and XVIII of this Act and subchapter E of chapter 1 and subchapter 
A of chapter 9 of the Internal Revenue Code of 1939, and chapters 
2 and 21 of the Internal Revenue Code of 1954. A final account- 
ing of such payments for any fiscal year shall be made at the earliest 
practicable date after the close thereof. There are hereby authorized 
to be made available for expenditure, out of any or all of the Trust 
Funds, such amounts as the Congress may deem appropriate to pay the 
costs of the part of the administration of this title, title XVI, and title 
XVIII for which the Secretary of Health, Education, and Welfare is 
responsible and of carrying out the functions of the Department of 
Health, Education, and Welfare, specified in section 232, which relate 
to the administration of provisions of the Internal Revenue Code of 
1954 other than those referred to in clause (i) of the first sentence of 
this subparagraph. 

(B) After the close of each fiscal year the Secretary of Health. 
Education, and Welfare shall determine the portion of the costs, 
incurred during such fiscal year, of administration of this title, title 
XVI, and title XVIII and of carrying out the functions of the De- 



64-310 O - 76 - 3 



Sec. 201(g) 



26 



partment of Health, Education, and Welfare, specified in section 232, 
which relate to the administration of provisions of the Internal Reve- 
nue Code of 1954 (other than those referred to in clauses (i) of the 
first sentence of subparagraph (A)), which should have been borne 
by the general fund in the Treasury and the portion of such costs 
which should have been borne by each of the Trust Funds; except 
that the determination of the amounts to be borne by the general 
fund in the Treasury with respect to expenditures incurred in carry- 
ing out such functions specified in section 232 shall be made pursuant 
to the method prescribed by the Board of Trustees under paragraph 
(4) of this subsection. After such determination has been made, the 
Secretary of Health, Education, and Welfare shall certify to the 
Managing Trustee the amounts, if any, which should be transfer- 
red from one to any of the other of such Trust Funds and the amounts, 
if any, which should be transferred between the Trust Funds (or 
one of the Trust Funds) and the general fund in the Treasury, in 
order to insure that each of the Trust Funds and the general fund in 
the Treasury have borne their proper share of the costs, incurred 
during such fiscal year, for the part of the administration of this 
title, title XVI, and title XVIII for which the Secretary of Health, 
Education, and Welfare is responsible and of carrying out the func- 
tions of the Department of Health, Educaton, and Welfare, specified 
in section 232, which relate to the administration of provisions of the 
Internal Revenue Code of 1954 (other than those referred to in clause 
(i) of the first sentence of subparagraph (A) ). The Managing Trus- 
tee is authorized and directed to transfer any such amounts in accord- 
ance with any certification so made. 1 

(2) The Managing Trustee is directed to pay from time to time 
from the Trust Funds into the Treasury the amount estimated by 
him as taxes imposed under section 3101(a) which are subject 
to refund under section 6413(c) of the Internal Revenue Code of 
1954 with respect to wages (as defined in section 1426 of the Internal 
Revenue Code of 1939 and section 3121 of the Internal Revenue Code 
of 1954) paid after December 31, 1950. Such taxes shall be deter- 
mined on the basis of the records of wages established and maintained 
by the Secretary of Health, Education, and Welfare in accordance 
with the wages reported to the Commissioner of Internal Revenue 
pursuant to section 1420(c) of the Internal Revenue Code of 1939 and 
to the Secretary of the Treasury or his delegate pursuant to subtitle F 
of the Internal Revenue Code of 1954, and the Secretary shall furnish 
the Managing Trustee such information as may be required by the 
Trustee for such purpose. The payments by the Managing Trustee 
shall be covered into the Treasury as repayments to the account for 

1 Subsection (e)(1) was amended by section 8(d) of Public Law 94-202. See also section 
H(f) of Public Law 94-202 which appears in this document on papre 744. 



27 



Sec. 201 (i) 



refunding internal revenue collections. Payments pursuant to the first 
sentence of this paragraph shall be made from the Federal Old- Age 
and Survivors Insurance Trust Fund and the Federal Disability In- 
surance Trust Fund in the ratio in which amounts were appropriated 
to such Trust Funds under clause (3) of subsection (a) of this section 
and clause (1) of subsection (b) of this section. 

(3) Repayments made under paragraph (1) or (2) shall not be 
available for expenditures but shall be carried to the surplus fund of 
the Treasury. If it subsequently appears that the estimates under 
either such paragraph in any particular period were too high or too 
low, appropriate adjustments shall be made by the Managing Trustee 
in future payments. 

(4) The Board of Trustees shall prescribe before January 1, 1981, 
the method of determining the costs which should be borne by the gen- 
eral fund in the Treasury of carrying out the functions of the Depart- 
ment of Health, Education, and Welfare, specified in section 232, 
which relate to the administration of provisions of the Internal 
Revenue Code of 1954 (other than those referred to in clause (i) of 
the first sentence of paragraph (1)(A)). If at any time or times 
thereafter the Boards of Trustees of such Trust Fund deem such 
action advisable they may modify the method so determined. 1 

(h) Benefit payments required to be made under section 223, and 
benefit payments required to be made under subsection (b), (c), or 
(d), of section 202 to individuals entitled to benefits on the basis 
of the wages and self -employment income of an individual entitled to 
disability insurance benefits, shall be made only from the Federal Dis- 
ability Insurance Trust Fund. All other benefit payments required 
to be made under this title (other than section 226) shall be made only 
from the Federal Old- Age and Survivors Insurance Trust Fund. 

(i) (1) The Managing Trustee of the Federal Old- Age and Survi- 
vors Insurance Trust Fund, the Federal Disability Insurance Trust 
Fund, the Federal Hospital Insurance Trust Fund, and the Federal 
Supplementary Medical Insurance Trust Fund is authorized to ac- 
cept on behalf of the United States money gifts and bequests made 
unconditionally to any one or more of such Trust Funds or to the 
Department of Health, Education, and Welfare, or any part or officer 
thereof, for the benefit of any of such Funds or any activity financed 
through such Funds. 

(2) Any such gift accepted pursuant to the authority granted in 
paragraph (1) of this subsection shall be deposited in — 

(A) the specific trust fund designated by the donor or 

(B) if the donor has not so designated, the Federal Old- Age 
and Survivors Insurance Trust Fund. 

/Paragraph (4) was added by section 8 of Public Law 94-202. See also section 8(e) 
ot Fublic Law 94-202 which is reprinted in this document on page 744. 



Sec. 202(a) 



28 



Old-Age and Survivors Insurance Benefit Payments 

Old-Age Insurance Benefits 

Sec. 202. (a) Every individual who — 

(1) is a fully insured individual (as defined in section 214(a) ), 

(2) has attained age 62, and 

(3) has filed application for old-age insurance benefits or was 
entitled to disability insurance benefits for the month preceding 
the month in which he attained the age of 65, 

shall be entitled to an old-age insurance benefit for each month, be- 
ginning with the first month after August 1950 in which such indi- 
vidual becomes so entitled to such insurance benefits and ending with 
the month preceding the month in which he dies. Except as provided 
in subsection (q) and subsection (w), such individual's old-age insur- 
ance benefit for any month shall be equal to his primary insurance 
amount (as defined in section 215(a) ) for such month. 

Wife's Insurance Benefits 

(b) (1) The wife (as defined in section 216(b) ) and every divorced 
wife (as defined in section 216(d) ) of an individual entitled to old-age 
or disability insurance benefits, if such wife or such divorced wife — 

(A) has filed application for wife's insurance benefits, 

(B) has attained age 62 or (in the case of a wife) has in her 
care (individually or jointly with such individual) at the time of 
filing such application a child entitled to a child's insurance bene- 
fit on the basis of the wages and self-employment income of such 
individual, 

(C) in the case of a divorced wife, is not married, and 

(D) is not entitled to old-age or disability insurance benefits 
or is entitled to old-age or disability insurance benefits based on 
a primary insurance amount which is less than one-half of the 
primary insurance amount of such individual, 

shall (subject to subsection (s) ) be entitled to a wife's insurance bene- 
fit for each month beginning with the first month in which she becomes 
so entitled to such insurance benefits and ending with the month pre- 
ceding the first month in which any of the following occurs — 

(E) she dies, 

(F) such individual dies, 

(G) in the case of a wife, they are divorced and either (i) she 
has not attained age 62, or (ii) she has attained age 62 but 
has not been married to such individual for a period of 20 years 
immediately before the date the divorce became effective, 

(H) in the case of a divorced wife, she marries a person other 
than such individual, 

(I) in the case of a wife who has not attained age 62, no child 
of such individual is entitled to a child's insurance benefit, 



29 



Sec. 202(c) 



(J) she becomes entitled to an old-age or disability insurance 
benefit based on a primary insurance amount which is equal to or 
exceeds one-half of the primary insurance amount of such indi- 
vidual, or 

(K) such individual is not entitled to disability insurance bene- 
fits and is not entitled to old-age insurance benefits. 

(2) Except as provided in subsection (q), such wife's insurance 
benefit for each month shall be equal to one-half of the primary insur- 
ance amount of her husband (or, in the case of a divorced wife, her 
former husband) for such month. 

(3) In the case of any divorced wife who marries — 

(A) an individual entitled to benefits under subsection (f) or 
(h) , of this section, or 

(B) an individual who has attained the age of 18 and is entitled 
to benefits under subsection (d) , 

such divorced wife's entitlement to benefits under this subsection shall, 
notwithstanding the provisions of paragraph (1) (but subject to sub- 
section (s)), not be terminated by reason of such marriage; except 
that, in the case of such a marriage to an individual entitled to bene- 
fits under subsection (d), the preceding provisions of this paragraph 
shall not apply with respect to benefits for months after the last month 
for which such individual is entitled to such benefits under subsection 
(d) unless he ceases to be so entitled by reason of his death. 

Husband's Insurance Benefits 

(c) (1) The husband (as defined in section 216(f) ) of an individual 
entitled to old-age or disability insurance benefits, if such husband — 

(A) has filed application for husband's insurance benefits, 

(B) has attained age 62, 

(C) was receiving at least one-half of his support, as deter- 
mined in accordance with regulations prescribed by the Secre- 
tary, from such individual — 

(i) if she had a period of disability which did not end 
prior to the month in which she became entitled to old-age 
or disability insurance benefits, at the beginning of such 
period or at the time she became entitled to such benefits, or 

(ii) if she did not have such a period of disability, at the 
time she became entitled to such benefits, 

and filed proof of such support within two years after the month 
in which she filed application with respect to such period of dis- 
ability or after the month in which she became entitled to such 
benefits, as the case may be, or, if she did not have such a period, 
two years after the month in which she became entitled to such 
benefits, and 

(D) is not entitled to old-age or disability insurance benefits, 
or is entitled to old-age or disability insurance benefits -based on a 



Sec. 202(d) 



30 



primary insurance amount which is less than one-half of the pri- 
mary insurance amount of his wife, 
shall be entitled to a husband's insurance benefit for each month, 
beginning with the first month after August 1950 in which he be- 
comes so entitled to such insurance benefits and ending with the month 
preceding the month in which any of the following occurs: he dies, 
his wife dies, they are divorced, or he becomes entitled to an old-age 
or disability insurance benefit, based on a primary insurance amount 
which is equal to or exceeds one-half of the primary insurance amount 
of his wife, or his wife is not entitled to disability insurance benefits 
and is not entitled to old-age insurance benefits. 

(2) The provisions of subparagraph (C) of paragraph (1) shall 
(subject to subsection (s)) not be applicable in the case of any hus- 
band who — 

(A) in the month prior to the month of his marriage to such 
individual was entitled to, or on application therefor and attain- 
ment of age 62 in such prior month would have been entitled to, 
benefits under subsection (f) or (h) ; 

(B) in the month prior to the month of his marriage to such 
individual had attained age eighteen and was entitled to, or on 
application therefor would have been entitled to, benefits under 
subsection (d) ; or 

(C) in the month prior to the month of his marriage to such 
individual he Avas entitled to, or on application therefor and at- 
tainment of the required age (if any) would have been entitled 
to, a widower's, child's (after attainment of age 18), or parent's 
insurance annuity under section 5 of the Railroad Retirement Act 
of 1937, as amended. 

(3) Except as provided in subsection (q), such husband's insurance 
benefit for each month shall be equal to one-half of the primary insur- 
ance amount of his wife for such month. 

Child's Insurance Benefits 

(d) (1) Every child (as defined in section 216(e) ) of an individual 
entitled to old-age or disability insurance benefits, or of an individual 
who dies a fully or currently insured individual if such child — 

(A) has filed application for child's insurance benefits, 

(B) at the time such application was filed was unmarried and 
(i) either had not attained the age of 18 or was a full-time student 
and had not attained the age of 22, or (ii) is under a disability (as 
defined in section 223(d)) which began before he attained the 
age of 22, and 

(C) was dependent upon such individual — 

(i) if such individual is living, at the time such application 
was filed, 

(ii) if such individual has died, at the time of such death, 

or 



31 



Sec. 202(d) 



(iii) if such individual had a period of disability which 
continued until he became entitled to old-age or disability 
insurance benefits, or (if he has died) until the month of his 
death, at the beginning of such period of disability or at the 
time he became entitled to such benefits, 
shall be entitled to a child's insurance benefit for each month, begin- 
ning with the first month after August 1950 in which such child be- 
comes so entitled to such insurance benefits and ending with the month 
preceding which ever of the following first occurs — 

(D) the month in which such child dies, or marries, 

(E) the month in which such child attains the age of 18. but 
only if he (i) is not under a disability (as so defined) at the time 
he attains such age, and (ii) is not a full-time student during any 
part of such month. 

(F) if such child was not under a disability (as so defined) 
at the time he attained the age of 18, the earlier of — 

(i) the first month during no part of which he is a full- 
time student, or 

(ii) the month in which he attains the age of 22, 

but only if he was not under a disability (as so defined) in such 
earlier month ; or 

(G) if such child was under a disability (as so defined) at 
the time he attained the age of 18, or if he was not under a dis- 
ability (as so defined) at such time but was under a disability 
(as so defined) at or prior to the time he attained (or would at- 
tain) the age of 22, the third month following the month in which 
he ceases to be under such disability or (if later) the earlier of — 

(i) the first month during no part of which he is a full- 
time student, or 

(ii) the month in which he attains the age of 22, 

but only if he was not under a disability (as so defined) in such 
earlier month. 

Entitlement of anv child to benefits under this subsection on the basis 
of the wages and self-employment income of an individual entitled to 
disabilitv insurance benefits shall also end with the month before the 
first month for which such individual is not entitled to such benefits 
unless such individual is, for such later month, entitled to old-age in- 
surance benefits or unless he dies in such month. No payment under 
this paragraph may be made to a child who would not meet the defini- 
tion of disability in section 223(d) except for paragraph (1) (B) 
thereof for any month in which he engages in substantial gainful 
activity. 

(2) Such child's insurance benefit for each month shall, if the indi- 
vidual on the basis of whose wages and self -employment income the 
child is entitled to such benefit has not died prior to the end of such 



Sec. 202(d) 



32 



month, be equal to one-half of the primary insurance amount of such 
individual for such month. Such child's insurance benefit for each 
month shall, if such individual has died in or prior to such month, be 
equal to three-fourths of the primary insurance amount of such in- 
dividual. 

(3) A child shall be deemed dependent upon his father or adopting 
father or his mother or adopting mother at the time specified in para- 
graph (1)(C) unless, at such time, such individual was not living 
with or contributing to the support of such child and — 

(A) such child is neither the legitimate nor adopted child of 
such individual, or 

(B) such child has been adopted by some other individual. 
For purposes of this paragraph, a child deemed to be a child of a fully 
or currently insured individual pursuant to section 216(h) (2) (B) or 
section 216(h) (3) shall be deemed to be the legitimate child of such 
individual. 

(4) A child shall be deemed dependent upon his stepfather or step- 
mother at the time specified in paragraph (1) (C) if, at such time, 
the child was living with or was receiving at least one-half of his sup- 
port from such stepfather or stepmother. 

(5) In the case of a child who has attained the age of eighteen and 
who marries— 

(A) an individual entitled to benefits under subsection (a) , (b) , 
(e), (f), (g), or (h) of this section or under section 223(a), or 

(B) another individual who has attained the age of eighteen 
and is entitled to benefits under this subsection, 

such child's entitlement to benefits under this subsection shall, not- 
withstanding the provisions of paragraph (1) but subject to subsec- 
tion (s), not be terminated by reason of such marriage; except that, 
in the case of such a mariage to a male individual entitled to benefits 
under section 223(a) or this subsection, the preceding provisions of 
this paragraph shall not apply with respect to benefits for months 
after the last month for which such individual is entitled to such bene- 
fits under section 223(a) or this subsection unless (i) he ceases to be 
so entitled by reason of his death, or (ii) in the case of an individual 
who was entitled to benefits under section 223(a), he is entitled, for 
the month following such last month, to benefits under subsection (a) 
of this section. 

(6) A child whose entitlement to child's insurance benefits on the 
basis of the wages and self-employment income of an insured indi- 
vidual terminated with the month preceding the month in which such 
child attained the age of 18, or with a subsequent month, may again 
become entitled to such benefits (provided no event specified in para- 
graph (1)(D) has occurred) beginning with the first month there- 
after in which he — 



33 



Sec. 202(d) 



(A) (i) is a full-time student or is under a disability (as defined 
in section 223(d)), and (ii) had not attained the age of 22, or 

(B) is under a disability (as so defined) which began before 
the close of the 84th month following the month in which his 
most recent entitlement to child's insurance benefits terminated 
because he ceased to be under such disability, 

but only if he has filed application for such reentitlement. Such reen- 
titlement shall end with the month preceding whichever of the follow- 
ing first occurs : 

(C) the first month in which an event specified in paragraph 
(1) (D) occurs; 

(D) the earlier of (i) the first month during no part of which 
he is a full-time student, or (ii) the month in which he attains the 
age of 22, but only if he is not under a disability (as so defined) 
in such earlier month ; or 

(E) if he was under a disability (as so defined) , the third month 
following the month in which he ceases to be under such dis- 
ability or (if later) the earlier of — 

(i) the first month during no part of which he is a full- 
time student, or 

(ii) the month in which he attains the age of 22. 
(7) For the purposes of this subsection — 

(A) A "full-time student" is an individual who is in full-time 
attendance as a student at an educational institution, as deter- 
mined by the Secretary (in accordance with regulations pre- 
scribed by him) in the light of the standards and practices of the 
institutions involved, except that no individual shall be considered 
a "full-time student" if he is paid by his employer while attend- 
ing an educational institution at the request, or pursuant to a re- 
quirement, of his employer. 

(B) Except to the extent provided in such regulations, an 
individual shall be deemed to be a full-time student during any 
period of nonattendance at an educational institution at which 
he has been in full-time attendance if (i) such period is 4 calendar 
months or less, and (ii) he shows to the satisfaction of the Secre- 
tary that he intends to continue to be in full-time attendance at 
an educational institution immediately following such period. An 
individual who does not meet the requirement of clause (ii) with 
respect to such period of nonattendance shall be deemed to have 
met such requirement (as of the beginning of such period) if he 
is in full-time attendance at an educational institution immedi- 
ately following such period. 

(C) An "educational institution" is (i) a school or college or 
university operated or directly supported by the United States, 
or by any State or local government or political subdivision there- 



Sec. 202(d) 



34 



of, or (ii) a school or college or university which has been ap- 
proved by a State or accredited by a State-recognized or 
nationally-recognized accrediting agency or body, or (iii) a non- 
accredited school or college or university whose credits are ac- 
cepted, on transfer, by not less than three institutions which are 
so accredited, for credit on the same basis as if transferred from 
an institution so accredited. 

(D) A child who attains age 22 at a time when he is a full-time 
student (as defined in subparagraph (A) of this paragraph and 
without the application of subparagraph (B) of such paragraph) 
but has not (at such time) completed the requirements for, or 
received, a degree from a four-year college or university shall be 
deemed (for purposes of determining whether his entitlement to 
benefits under this subsection has terminated under paragraph 
(1)(F) and for purposes of determining his initial entitlement 
to such benefits under clause (i) of paragraph (1)(B)) not to 
have attained such age until the first day of the first month fol- 
lowing the end of the quarter or semester in which he is enrolled 
at such time (or, if the educational institution (as defined in this 
paragraph) in which he is enrolled is not operated on a quarter 
or semester system, until the first day of the first month following 
the completion of the course in which he is so enrolled or until 
the first day of the third month beginning after such time, which- 
ever first occurs) . 
(8) In the case of — 

(A) An individual entitled to old-age insurance benefits (other 
than an individual referred to in subparagraph (B)) 3 or 

(B) an individual entitled to disability insurance benefits, or 
an individual entitled to old-age insurance benefits who was 
entitled to disability insurance benefits for the month preceding 
the first month for which he was entitled to old-age insurance 
benefits, 

a child of such individual adopted after such individual became en- 
titled to such old-age or disability insurance benefits shall be deemed 
not to meet the requirements of clause (i) or (iii) of paragraph (1) 
(C) unless such child — 

(C) is the natural child or stepchild of such individual (in- 
cluding such a child who was legally adopted by such individual) , 
or 

(D) (i) was legally adopted by such individual in an adoption 
decreed by a court of competent jurisdiction within the United 
States, 

(ii) was living with such individual in the United States and 
receiving at least one-half of his support from such individual 
(I) if he is an individual referred to in subparagraph (A), for 



35 



Sec. 202(d) 



the year immediately before the month in which such individual 
became entitled to old-age insurance benefits or, if such individual 
had a period of disability which continued until he had become 
entitled to old-age insurance benefits, the month in which such 
period of disability began, or (II) if he is an individual referred 
to in subparagraph (B), for the year immediately before the 
month in which began the period of disability of such individual 
which still exists at the time of adoption (or, if such child was 
adopted by such individual after such individual attained age 65, 
the period of disability of such individual which existed in the 
month preceding the month in which he attained age 65), or the 
month in which such individual became entitled to disability 
insurance benefit, or (III) if he is an individual referred to in 
either subparagraph (A) or subparagraph (B) and the child is 
the grandchild of such individual or his or her spouse, for the year 
immediately before the month in which such child files his or her 
application for child's insurance benefits, and 

(iii) had not attained the age of 18 before he began living 
with such individual. 
In the case of a child who was born in the one-year period during 
which such child must have been living with and receiving at least 
one-half of his support from such individual, such child shall be 
deemed to meet such requirements for such period if, as of the close 
of such period, such child has lived with such individual in the United 
States and received at least one-half of his support from such indi- 
vidual for substantially all of the period which begins on the date of 
birth of such child. 

(9) (A) A child who is a child of an individual under clause (3) 
of the first sentence of section 216(e) and is not a child of such indi- 
vidual under clause (1) or (2) of such first sentence shall be deemed 
not to be dependent on such individual at the time specified in sub- 
paragraph (1) (C) of this subsection unless (i) such child was liv- 
ing with such individual in the United States and receiving at least 
one-half of his support from such individual (I) for the year imme- 
diately before the month in which such individual became entitled to 
old-age insurance benefits or disability insurance benefits or died, or 
(II) if such individual had a period of disability which continued 
until he had become entitled to old-age insurance benefits, or disability 
insurance benefits, or died, for the year immediately before the month 
in which such period of disability began, and (ii) the period during 
which such child was living with such individual began before the 
child attained age 18. 

(B) In the case of a child who was born in the one-year period dur- 
ing which such child must have been living with and receiving at least 
one-half of his support from such individual, such child shall be 



Sec. 202(e) 



36 



deemed to meet such requirements for such period if, as of the close 
of such period, such child has lived with such individual in the United 
States and received at least one-half of his support from such indi- 
vidual for substantially all of the period which begins on the date of 
such child's birth. 

Widow's Insurance Benefits 

(e) (1) The widow (as defined in section 216(c) ) and every surviv- 
ing divorced wife (as defined in section 216(d) ) of an individual who 
died a fully insured individual, if such widow or such surviving di- 
vorced wife — 

(A) is not married, 

(B) (i) has attained age 60, or (ii) has attained age 50 but has 
not attained age 60 and is under a disability (as defined in sec- 
tion 223(d)) which began before the end of the period specified 
in paragraph ( 5 ) , 

(C) (i) has filed application for widow's insurance benefits, or 
was entitled to wife's insurance benefits, on the basis of the 
wages and self -employment income of such individual, for the 
month preceding the month in which he died, and (I) has attained 
age 65 or (II) is not entitled to benefits under subsection (a) or 
section 223. or 

(ii) was entitled, on the basis of such wages and self -employ- 
ment income, to mother's insurance benefits for the month pre- 
ceding the month in which she attained age 65, and 

(D) is not entitled to old-age insurance benefits or is entitled 
to old-age insurance benefits each of which is less than the pri- 
mary insurance amount of such deceased individual, shall be 
entitled to a widow's insurance benefit for each month, beginning 
with — 

(E) if she satisfies subparagraph (B) by reason of clause (i) 
thereof, the first month in which she becomes so entitled to such 
insurance benefits, or 

(F) if she satisfies subparagraph (B) by reason of clause (ii) 
thereof — 

(i) the first month after her waiting period (as defined in 
paragraph (6)) in which she becomes so entitled to such 
insurance benefits, or 

(ii) the first month during all of which she is under a dis- 
ability and in which she becomes so entitled to such insurance 
benefits, but only if she was previously entitled to insurance 
benefits under this subsection on the basis of being under a 
disability and such first month occurs (I) in the period 
specified in paragraph (5) and (II) after the month in 
which a previous entitlement to such benefits on such basis 
terminated, 



37 



Sec. 202(e) 



and ending with the month preceding the first month in which any 
of the following occurs: she remarries, dies, becomes entitled to an 
old-age insurance benefit equal to or exceeding the primary insur- 
ance amount of such deceased individual, or, if she became entitled to 
such benefits before she attained age 60, the third month following the 
month in which her disability ceases (unless she attains age 65 on or 
before the last day of such third month) . 

(2) (A) Except as provided in subsection (q), paragraph (4) of this 
subsection, and subparagraph (B) of this paragraph, such widow's 
insurance benefit for each month shall be equal to the primary insur- 
ance amount of such deceased individual. 

(B) If the deceased individual (on the basis of whose wages and 
self-employment income a widow or surviving divorced wife is en- 
titled to widow's insurance benefits under this subsection) was, at any 
time, entitled to an old-age insurance benefit which was reduced by 
reason of the application of subsection (q), the widow's insurance 
benefit of such widow or surviving divorced wife for any month shall, 
if the amount of the widow's insurance benefit of such widow or sur- 
viving divorced wife (as determined under subparagraph (A) and 
after application of subsection (q)) is greater than — 

(i) the amount of the old-age insurance benefit to which such 
deceased individual would have been entitled (after application 
of subsection (q) ) for such month if such individual were still 
living, and 

(ii) S2y 2 percent of the primary insurance amount of such de- 
ceased individual, 

be reduced to the amount referred to in clause (i), or (if greater) the 
amount referred to in clause (ii) . 

(3) In the case of a widow or surviving divorced wife who marries — 

(A) an individual entitled to benefits under subsection (f) or 
(h) of this section, or 

(B) an individual who has attained the age of eighteen and is 
entitled to benefits under subsection (d) , 

such widow's or surviving divorced wife's entitlement to benefits under 
this subsection shall, notwithstanding the provisions of paragraph (1) 
but subject to subsection (s), not be terminated by reason of such 
marriage ; except that, in the case of such a marriage to an individual 
entitled to benefits under subsection (d), the preceding provisions of 
this paragraph shall not apply with respect to benefits for months 
after the last month for which such individual is entitled to such bene- 
fits under subsection (d) unless he ceases to be so entitled by reason 
of his death. 

(4) If a widow, after attaining the age of 60, marries an individual 
(other than one described in subparagraph (A) or (B) of paragraph 
(3) ), such marriage shall, for purposes of paragraph (1), be deemed 



38 



not to have occurred; except that, notwithstanding the provisions of 
paragraph (2) and subsection (q), such widow's insurance benefit 
for the month in which such marriage occurs and each month there- 
after prior to the month in which the husband dies or such marriage is 
otherwise terminated, shall be equal to one-half of the primary insur- 
ance amount of the deceased individual on whose wages and self- 
employment income such benefit is based; 

(5) The period referred to in paragraph (l)(B)(ii), in the case 
of any widow or surviving divorced wife, is the period beginning with 
whichever of the following is the latest : 

(A) the month in which occurred the death of the fully in- 
sured individual referred to in paragraph (1) on whose wages 
and self-employment income her benefits are or would be based, 
or 

(B) the last month for which she was entitled to mothers in- 
surance benefits on the basis of the wages and self-employment 
income of such individual, or 

(C) the month in which a previous entitlement to widow's in- 
surance benefits on the basis of such wages and self-employment 
income terminated because her disability had ceased. 

and ending with the month before the month in which she attains age 
60, or, if earlier, with the close of the eighty-fourth month following 
the month with which such period began. 

(6) The waiting period referred to in paragraph (1)(F), in the 
case of any widow or surviving divorced wife, is the earliest period of 
five consecutive calendar months — 

(A) throughout which she has been under a disability, and 

(B) which begins not earlier than with whichever of the fol- 
lowing is the later: (i) the first day of the seventeenth month 
before the month in which her application is filed, or (ii) the first 
day of the fifth month before the month in which the period 
specified in paragraph (5) begins. 

(7) In the case of an individual entitled to monthly insurance 
benefits payable under this section for any month prior to January 
1973 whose benefits were not redetermined under section 102(g) of 
the Social Security Amendments of 1972, such benefits shall not be 
redetermined pursuant to such section, but shall be increased pursuant 
to any general benefit increase (as defined in section 215 (i) (3) ) or any 
increase in benefits made under or pursuant to section 215 (i), includ- 
ing for this purpose the increase provided effective for March 1974, 
as though such redetermination had been made. 

Widower's Insurance Benefits 

(f) (1) The widower (as defined in section 216(g) ) of an individual 
who died a fully insured individual, if such widower — 
(A) has not remarried, 



39 



Sec. 202(f) 



(B) (i) has attained age 60, or (ii) has attained age 50 but has 
not attained age 60 and is under a disability (as defined in section 
223(d)) which began before the end of the period specified in 
paragraph (6), 

(C) has filed application for widower's insurance benefits or 
was entitled to husband's insurance benefits, on the basis of the 
wages and self- employment income of such individual, for the 
month preceding the month in which she died, and (I) has at- 
tained age 65 or (II) is not entitled to benefits under subsection 
(a) or section 223, 

(D) (i) was receiving at least one-half of his support, as deter- 
mined in accordance with regulations prescribed by the Secretary, 
from such individual at the time of her death or, if such indi- 
vidual had a period of disability which did not end prior to the 
month in which she died, at the time such period began or at the 
time of her death, and filed proof of such support within two 
years after the date of such death, or, if she had such a period of 
disability, within two years after the month in which she filed 
application with respect to such period of disability or two yeary 
after the date of such death, as the case may be, or (ii) was re- 
ceiving at least one-half of his support, as determined in accord- 
ance with regulations prescribed by the Secretary from such 
individual at the time she became entitled to old-age or disability 
insurance benefits or, if such individual had a period of disability 
which did not end prior to the month in which she became so 
entitled, at the time such period began or at the time she became 
entitled to such benefits, and filed proof of such support within 
two vears after the month in which she became entitled to such 
benefits, or, if she had such a period of disability, within two 
years after the month in which she filed application with respect 
to such period of disability or two years after the month in which 
she became entitled to such benefits, as the case may be, 

(E) is not entitled to old-age insurance benefits, or is entitled 
to old-age insurance benefits each of which is less than the pri- 
marv insurance amount of his deceased wife, 

shall be entitled to a widower's insurance benefit for each month, be- 
ginning with — 

(F) if he satisfies subparagraph (B) by reason of clause (i) 
thereof, the first month in which he becomes Su entitled to such 
insurance benefits, or 

(G) if he satisfies subparagraph (B) by reason of clause (ii) 
thereof — 

(i) the first month after his waiting period (as defined in 
paragraph (7)) in which he becomes so entitled to such in- 
surance benefits, or 



Sec. 202(f) 



40 



(ii) the first month during all of which he is under a dis- 
ability and in which he becomes so entitled to such insurance 
benefits, but only if he was previously entitled to insurance 
benefits under this subsection on the basis of being under a 
disability and such first month occurs (I) in the period 
specified in paragraph (6) and (II) after the month in 
which a previous entitlement to such benefits on such basis 
terminated, 

and ending with the month preceding the first month in which any of 
the following occurs: he remarries, dies, or becomes entitled to an old- 
age insurance benefit equal to or exceeding the primary insurance 
amount of his deceased wife, or, if he became entitled to such benefits 
before he attained age 60, the third month following the month 
in which his disability ceases (unless he attains age 65 on or before 
the last day of such third month) . 

(2) The provisions of subparagraph (D) of paragraph (1) shall 
(subject to subsection (s)) not be applicable in the case of any indi- 
vidual who — 

(A) in the month prior to the month of his marriage to such 
individual was entitled to, or on application therefor and attain- 
ment of age 62 in such prior month would have been entitled to. 
benefits under this subsection or subsection (h) ; 

(B) in the month prior to the month of his marriage to such 
individual had attained age eighteen and was entitled to, or on 
application therefor would have been entitled to, benefits under 
subsection (d) ; or 

(C) in the month prior to the month of his marriage to such 
individual he was entitled to, or on application therefor and 
attainment of the required age (if any), would have been entitled 
to, a widower's, child's (after attainment of age 18), or parent's 
insurance annuity under section 5 of the Railroad Retirement Act 
of 1937, as amended. 

(3) (A) Except as provided in subsection (q), paragraph (5), of 
this subsection, and subparagraph (B) of this paragraph, such wid- 
ower's insurance benefit for each month shall be equal to the primary 
insurance amount of his deceased wife. 

(B) If the deceased wife (on the basis of whose wages and self- 
employment income a widower is entitled to widower's insurance bene- 
fits under this subsection) was, at any time, entitled to an old-age 
insurance benefit which was reduced by reason of the application of 
subsection (q), the widower's insurance benefit of such widower for 
any month shall, if the amount of the widower's insurance benefit of 
such widower (as determined under subparagraph (A) and after ap- 
plication of subsection (q) ) is greater than — 



41 



Sec. 202(f) 



(i) the amount of the old-age insurance benefit to which such 
deceased wife would have been entitled (after application of sub- 
section (q)) for such month if such wife were still living; and 

(ii) 82!/2 percent of the primary insurance amount of such de- 
ceased wife; 

be reduced to the amount referred to in clause (i), or (if greater) the 
amount referred to in clause (ii) . 

(4) In the case of a widower who remarries — 

(A) an individual entitled to benefits under subsection (b), 
(e), (g), or (h), or 

(B) an individual who has attained the age of eighteen and is 
entitled to benefits under subsection (d), 

such widower's entitlement to benefits under this subsection shall, 
notwithstanding the provisions of paragraph (1) but subject to sub- 
section (s), not be terminated by reason of such marriage. 

(5) If a widower, after attaining the age of 60, marries an in- 
dividual (other than one described in subparagraph (A) or (B) of 
paragraph (4)), such marriage shall, for purposes of paragraph (1), 
be deemed not to have occurred ; except that, notwithstanding the pro- 
visions of paragraph (3) and subsection (q) , such widower's insurance 
benefit for the month in which such marriage occurs and each month 
thereafter prior to the month in which the wife dies or such marriage 
is otherwise terminated, shall be equal to one-half of the primary 
insurance amount of the deceased individual on whose wages and self- 
employment income such benefit is based. 

(6) The period referred to in paragraph (1) (B) (ii), in the case 
of any widower, is the period beginning with Avhichever of the follow- 
ing is the latest : 

(A) the month in which occurred the death of the fully in- 
sured individual referred to in paragraph (1) on whose wages 
and self-employment income his benefits are or would be based, or 

(B) the month in which a previous entitlement to widower's 
insurance benefits on the basis of such wages and self-employ- 
ment income terminated because his disability had ceased, 

and ending with the month before the month in which he attains age 
60, or, if earlier, with the close of the eighty-fourth month following 
the month with which such period began. 

(7) The waiting period referred to in paragraph (1) (G), in the 
case of any widower, is the earliest period of five consecutive calendar 
months — ■ 

(A) throughout which he has been under a disability, and 

(B) which begins not earlier than with whichever of the fol- 
lowing is the later: (i) the first day of the seventeenth month 
before the month in which his application is filed, or (ii) the 
first day of the fifth month before the month in which the period 
specified in paragraph (6) begins. 



64-310 O - 76 - 4 



Sec. 202(f) 



42 



(8) In the case of an individual entitled to monthly insurance 
benefits payable under this section for any month prior to January 
1973 whose benefits were not redetermined under section 102(g) of 
the Social Security Amendments of 1972, such benefits shall not be 
redetermined pursuant to such section, but shall be increased pursuant 
to any general benefit increase (as defined in section 215 (i) (3) ) or any 
increase in benefits made under or pursuant to section 215 (i), includ- 
ing for this purpose the increase provided effective for March 1974, 
as though such redetermination had been made. 

Mother's Insurance Benefits 

(g) (1) The widow and every surviving divorced mother (as de- 
fined in section 216(d) ) of an individual who died a fully or currently 
insured individual, if such widow or surviving divorced mother — 

(A) is not married, 

(B) is not entitled to a widow's insurance benefit, 

(C) is not entitled to old-age insurance benefits, or is entitled 
to old-age insurance benefits each of which is less than three- 
fourths of the primary insurance amount of such individual, 

(D) has filed application for mother's insurance benefits, or was 
entitled to wife's insurance benefits on the basis of the wages and 
self -employment income of such individual for the month pre- 
ceding the month in which he died, 

(E) at the time of filing such application has in her care a child 
of such individual entitled to a child's insurance benefit, and 

(F) in the case of a surviving divorced mother — 

(i) the child referred to in subparagraph (E) is her son, 
daughter, or legally adopted child, and 

(ii) the benefits referred to in such subparagraph are pay- 
able on the basis of such individual's wages and self -employ- 
ment income, 

shall (subject to subsection (s)) be entitled to a mother's insurance 
benefit for each month, beginning with the first month after August 
1950 in which she becomes so entitled to such insurance benefits and 
ending with the month preceding the first month in which any of the 
following occurs : no child of such deceased individual is entitled to a 
child's insurance benefit, such widow or surviving divorced mother be- 
comes entitled to an old-age insurance benefit equal to or exceeding 
three-fourths of the primary insurance amount of such deceased in- 
dividual, she becomes entitled to a widow's insurance benefit, she re- 
marries, or she dies. Entitlement to such benefits shall also end, in the 
case of a surviving divorced mother, with the month immediately pre- 
ceding the first month in which no son, daughter, or legally adopted 
child of such surviving divorced mother is entitled to a child's insur- 
ance benefit on the basis of the wages and self-employment income 
of such deceased individual. 



43 



Sec. 202(h) 



(2) Such mother's insurance benefit for each month shall be equal 
to three-fourths of the primary insurance amount of such deceased 
individual. 

(3) In the case of a widow or surviving divorced mother who mar- 
ries — 

(A) an individual entitled to benefits under subsection (a), 
(f ), or (h), or under section 223(a) , or 

(B) an individual who has attained the age of eighteen and is 
entitled to benefits under subsection (d) , 

the entitlement of such widow or surviving divorced mother to benefits 
under this subsection shall, notwithstanding the provisions of para- 
graph (1) but subject to subsection (s), not be terminated by reason 
of such marriage; except that, in the case of such a marriage to an 
individual entitled to benefits under section 223(a) or subsection (d) 
of this section, the preceding provisions of this paragraph shall not 
apply with respect to benefits for months after the last month for 
which such individual is entitled to such benefits under section 223 ( a ) 
or subsection (d) of this section unless (i) he ceases to be so entitled 
by reason of his death, or (ii) in the case of an individual who was 
entitled to benefits under section 223(a), he is entitled, for the month 
following such last month, to benefits under subsection (a) of this 
section. 

Parent's Insurance Benefits 

(h) (1) Every parent (as defined in this subsection) of an individual 
who died a fully insured individual if such parent — 

(A) has attained age 62, 

(B) (i) was receiving at least one-half of his support from such 
individual at the time of such individual's death or, if such indi- 
vidual had a period of disability which did not end prior to the 
month in which he died, at the time such period began or at the 
time of such death, and (ii) filed proof of such support within 
two years after the date of such death, or, if such individual had 
such a period of disability, within two years after the month in 
which such individual filed application with respect to such period 
of disability or two years after the date of such death, as the case 
may be, 

(C) has not married since such individual's death, 

(D) is not entitled to old-age insurance benefits, or is entitled 
to old-age insurance benefits each of which is less than 82% per- 
cent of the primary insurance amount of such deceased individual 
if the amount of the parent's insurance benefit for such amount is 
determinable under paragraph (2) (A) (or 75 percent of such 
primary insurance amount in any other case) , and 

(E) has filed application for parent's insurance benefits, 

shall be entitled to a parent's insurance benefit for each month begin- 



Sec. 202(h) 



44 



ning with the first month after August 1950 in which such parent 
becomes so entitled to such parent's insurance benefits and ending with 
the month preceding the first month in which any of the following 
occurs: such parent dies, marries, or becomes entitled to an old-age 
insurance benefit equal to or exceeding 82y 2 percent of the primary 
insurance amount of such deceased individual if the amount of the 
parent's insurance benefit for such month is determinable under para- 
graph (2) (A) (or 75 percent of such primary insurance amount in 
any other case). 

(2) (A) Except as provided in subparagraphs (B) and (C), such 
parent's insurance benefit for each month shall be equal to 82% per- 
cent of the primary insurance amount of such deceased individual. 

(B) For any month for which more than one parent is entitled to 
parent's insurance benefits on the basis of such deceased individual's 
wages and self -employment income, such benefit for each such parent 
for such month shall (except as provided in subparagraph (C)) be 
equal to 75 percent of the primary insurance amount of such deceased 
individual. 

(C) In any case in which — 

(i) any parent is entitled to a parent's insurance benefit for a 
month on the basis of a deceased individual's wages and self- 
employment income, and 

(ii) another parent of such deceased individual is entitled to a 
parent's insurance benefit for such month on the basis of such 
wages and self-employment income, and on the basis of an appli- 
cation filed after such month and after the month in which the 
application for the parent's benefits referred to in clause (i) was 
filed, 

the amount of the parent's insurance benefit of the parent referred to 
in clause (i) for the month referred to in such clause shall be deter- 
mined under subparagraph (A) instead of subparagraph (B) and the 
amount of the parent's insurance benefit of a parent referred to in 
clause (ii) for such month shall be equal to 150 percent of the primary 
insurance amount of the deceased individual minus the amount (be- 
fore the application of section 203(a)) of the benefit for such month 
of the parent referred to in clause (i) . 

(3) As used in this subsection, the term "parent" means the mother 
or father of an individual, a stepparent of an individual by a marriage 
contracted before such individual attained the age of sixteen, or an 
adopting parent by whom an individual was adopted before he at- 
tained the age of sixteen. 

(4) In the case of a parent who marries — 

(A) an individual entitled to benefits under this subsection or 
subsection (b), (e), (f),or (g),or 

(B) an individual who has attained the age of eighteen and is 
entitled to benefits under subsection (d) , 



45 



Sec. 202(i) 



such parent's entitlement to benefits under this subsection shall, not- 
withstanding the provisions of paragraph (1) but subject to subsec- 
tion (s), not be terminated by reason of such marriage; except that, 
in the case of such a marriage to a male individual entitled to bene- 
fits under subsection (d), the preceding provisions of this paragraph 
shall not apply with respect to benefits for months after the last month 
for which such individual is entitled to such benefits under subsection 
(d) unless he ceases to be so entitled by reason of his death. 

Lump-Sum Death Payments 

(i) Upon the death, after August 1950, of an individual who died a 
fully or currently insured individual, an amount equal to three times 
such individual's primary insurance amount, or an amount equal to 
$255, whichever is the smaller, shall be paid in a lump sum to the per- 
son, if any, determined by the Secretary to be the widow or widower 
of the deceased and to have been living in the same household with the 
deceased at the time of death. If there is no such person, or if such per- 
son dies before receiving payment, then such amount shall be paid — 

(1) if all or part of the burial expenses of such insured indi- 
vidual which are incurred by or through a funeral home or fun- 
eral homes remains unpaid, to such funeral home or funeral homes 
to the extent of such unpaid expenses, but only if (A) any per- 
son who assumed the responsibility for the payment of all or 
any part of such burial expenses files an application, prior to the 
expiration of two years after the date of death of such insured 
individual, requesting that such payment be made to such funeral 
home or funeral homes, or (B) at least 90 days have elapsed after 
the date of death of such insured individual and prior to the ex- 
piration of such 90 days no person has assumed responsibility for 
the payment of any such burial expenses ; 

(2) if all of the burial expenses of such insured individual 
which were incurred by or through a funeral home or funeral 
homes have been paid (including payments made under clause 
(1)), to any person or persons, equitably entitled thereto, to the 
extent and in the proportions that he or they shall have paid such 
burial expenses ; 

(3) if the body of such insured individual is not available for 
burial but expenses were incurred with respect to such individual 
in connection with a memorial service, a memorial marker, a site 
for the marker, or any other item of a kind for which expenses 
are customarily incurred in connection with a death and such 
expenses have been paid, to any person or persons, equitably 
entitled thereto, to the extent and in the proportions that he or 
they shall have paid such expenses ; or 

(4) if any part of the amount payable under this subsection 
remains after payments have been made pursuant to clauses (1), 



Sec. 202( j) 



46 



(2), and (3), to any person or persons, equitably entitled thereto, 
to the extent and in the proportions that he or they shall have paid 
other expenses in connection with the burial of such insured indi- 
vidual, in the following order of priority: (A) expenses of open- 
ing and closing the grave of such insured individual, (B) expenses 
of providing the burial plot of such insured individual, and (C) 
any remaining expenses in connection with the burial of such 
insured individual. 
No payment (except a payment authorized pursuant to clause (1) (A) 
of the preceding sentence) shall be made to any person under this sub- 
section unless application therefor shall have been filed, by or on be- 
half of such person (whether or not legally competent), prior to the 
expiration of two years after the date of death of such insured indi- 
vidual, or unless such person was entitled to wife's or husband's insur- 
ance benefits, on the basis of the wages and self-employment income 
of such insured individual, for the month preceding the month in which 
such individual died. In the case of any individual who died out- 
side the forty-eight States and the District of Columbia after Decem- 
ber 1953 and before January 1, 1957, whose death occurred while he 
was in the active military or naval service of the United States, and 
who is returned to any of such States, the District of Columbia, 
Alaska, Hawaii, the Commonwealth of Puerto Rico, the Virgin Is- 
lands, Guam, or American Samoa for interment or reinterment, the 
provisions of the preceding sentence shall not prevent payment to 
any person under the second sentence of this subsection if application 
for a lump-sum death payment with respect to such deceased in- 
dividual is filed by or on behalf of such person (whether or not legall} 7 
competent) prior to the expiration of two years after the date of such 
interment or reinterment. In the case of any individual who died out- 
side the fifty States and the District of Columbia after December 
1956 while he was performing service, as a member of a uniformed 
service, to which the provisions of section 210(1) (1) are applicable, 
and who is returned to any State or to any Territory or possession of 
the United States, for interment or reinterment, the provisions of the 
third sentence of this subsection shall not prevent payment to any 
person under the second sentence of this subsection if application for a 
lump-sum death payment with respect to such deceased individual is 
filed by or on behalf of such person (whether or not legally competent) 
prior to the expiration of two years after the date of such interment or 
reinterment. 

Application for Monthly Insurance Benefits 

(j)(l) An individual who would have been entitled to a benefit 
under subsection (a), (b), (c), (d), (e), (f), (g), or (h) for any 
month after August 1950 had he filed application therefor prior to 
the end of such month shall be entitled to such benefit for such month 



47 



Sec. 202(k) 



if he files application therefor prior to the end of the twelfth month 
immediately succeeding such month. Any benefit under this title for 
a month prior to the month in which application is filed shall be 
reduced, to any extent that may be necessary, so that it will not render 
erroneous any benefit which, before the filing of such application, the 
Secretary has certified for payment for such prior month. 

(2) An application for any monthly benefits under this section filed 
before the first month in which the applicant satisfies the require- 
ments for such benefits shall be deemed a valid application only if the 
applicant satisfies the requirements for such benefits before the Secre- 
tary makes a final decision on the application. If upon final decision 
by the Secretary, or decision upon judicial review thereof, such appli- 
cant is found to satisfy such requirements, the application shall be 
deemed to have been filed in such first month. 

(3) Notwithstanding the provisions of paragraph (1) , an individual 
may, at his option, waive entitlement to any benefit referred to in para- 
graph (1) for any one or more consecutive months (beginning with 
the earliest month for which such individual would otherwise be en- 
titled to such benefit) which occur before the month in which such 
individual files application for such benefit; and, in such case, such 
individual shall not be considered as entitled to such benefits for any 
such month or months before such individual filed such application. 
An individual shall be deemed to have waived such entitlement for any 
such month for which such benefit would, under the second sentence 
of paragraph ( 1 ) , be reduced to zero. 

Simultaneous Entitlement to Benefits 

(k) (1) A child, entitled to child's insurance benefits on the basis 
of the wages and self -employment income of an insured individual, 
who would be entitled, on filing application, to child's insurance bene- 
fits on the basis of the wages and self-employment income of some 
other insured individual, shall be deemed entitled, subject to the pro- 
visions of paragraph (2) hereof, to child's insurance benefits on the 
basis of the wages and self -employment income of such other individ- 
ual if an application for child's insurance benefits on the basis of the 
wages and self -employment income of such other individual has been 
filed by any other child who would, on filing application, be entitled 
to child's insurance benefits on the basis of the wages and self-employ- 
ment income of both such insured individuals. 

(2) (A) Any child who under the preceding provisions of this sec- 
tion is entitled for any month to child's insurance benefits on the wages 
and self -employment income of more than one insured individual shall, 
notwithstanding such provisions, be entitled to only one of such child's 
insurance benefits for such month. Such child's insurance benefits for 
such month shall be the benefit based on the wages and self-employ- 



Sec. 202(k) 



48 



merit income of the insured individual who has the greatest primary 
insurance amount, except that such child's insurance benefits for such 
month shall be the largest benefit to which such child could be entitled 
under subsection (d) (without the application of section 203(a)) or 
subsection (m) if entitlement to such benefit would not, with respect 
to any person, result in a benefit lower (after the application of section 
203(a) ) than the benefit which would be applicable if such child were 
entitled on the wages and self-employment income of the individual 
with the greatest primary insurance amount. Where more than one 
child is entitled to child's insurance benefits pursuant to the preceding 
provisions of this paragraph, each such child who is entitled on the 
wages and self-employment income of the same insured individuals 
shall be entitled on the wages and self -employment income of the same 
such insured individual. 

(B) Any individual (other than an individual to whom subsection 
(e)(4) or (f)(5) applies) who, under the preceding provisions of 
this section and under the provisions of section 223, is entitled for any 
month to more than one monthly insurance benefit (other than old-age 
or disability insurance benefit ) under this title shall be entitled to only 
one such monthly benefit for such month, such benefit to be the largest 
of the monthly benefits to which he (but for this subparagraph (B) ) 
would otherwise be entitled for such months. Any individual who is 
entitled for any month to more than one widow's or widower's insur- 
ance benefit to which subsection (e)(4) or (f)(5) applies shall be en- 
titled to only one such benefit for such month, such benefit to be the 
largest of such benefits. 

(3) (A) If an individual is entitled to an old-age or disability in- 
surance benefit for any month and to any other monthly insurance 
benefit for such month, such other insurance benefit for such month, 
after any reduction under subsection (q), subsection (e)(2) or (f) 
(3) , and any reduction under section 203(a) , shall be reduced, but not 
below zero, by an amount equal to such old-age or disability insurance 
benefit ( after reduction under such subsection (q) ) . 

(B) If an individual is entitled for any month to a widow's or 
widower's insurance benefit to which subsection (e)(4) or (f)(5) 
applies and to any other monthly insurance benefit under section 202 
(other than an old-age insurance benefit), such other insurance bene- 
fit for such month, after any reduction under subparagraph (A), any 
reduction under subsection (q), and any reduction under section 203 
(a), shall be reduced, but not below zero, by an amount equal to such 
widow's or widower's insurance benefit after any reduction or reduc- 
tions under such subparagraph (A) and such section 203(a). 

(4) Any individual who, under this section and section 223, is en- 
titled for any month to both an old-age insurance benefit and a dis- 
ability insurance benefit under this title shall be entitled to only the 



49 



Sec. 202(m) 



larger of such benefits for such month, except that, if such individual 
so elects, he shall instead be entitled to only the smaller of such bene- 
fits for such month. 

Entitlement to Survivor Benefits Under Railroad Retirement Act 

(1) If any person would be entitled, upon filing application there- 
for to an annuity under section 2 of the Railroad Retirement Act of 
1974, or to a lump-sum payment under section (6) (b) of such Act, 
with respect to the death of an employee (as defined in such Act) no 
lump-sum death payment, and no monthly benefit for the month in 
which such employee died or for any month thereafter, shall be paid 
under this section to any person on the basis of the wages and self- 
employment income of such employee. 

Minimum Survivor's Benefit 

(m) (1) In any case in which an individual is entitled to a monthly 
benefit under this section on the basis of the wages and self-employ- 
ment income of a deceased individual for any month and no other 
person is (without the application of subsection (j) (1) ) entitled to a 
monthly benefit under this section for such month on the basis of such 
wages and self-employment income, such individual's benefit amount 
for such month, prior to reduction under subsection (k)(3), shall 
be not less than the first amount appearing in column IV of the table 
in (or deemed to be in) section 215(a), except as provided in para- 
graph (2). 

(2) In the case of any such individual who is entitled to a monthly 
benefit under subsection (e) or (f), such individual's benefit amount, 
after reduction under subsection (q) (1), shall be not less than — 

(A) $84.50, if his first month of entitlement to such benefit is 
the month in which such individual attained age 62 or a subse- 
quent month, or 

(B) $84.50 reduced under subsection (q) (1) as if retirement 
age as specified in subsection (q)(6)(A)(ii) were age 62 instead 
of the age specified in subsection (q) (9) , if his first month of en- 
titlement to such benefit is before the month in which he attained 
age 62. 

(3) In the case of any individual whose benefit amount was com- 
puted (or recomputed) under the provisions of paragraph (2) and 
such individual was entitled to benefits under subsection (e) or (f ) for 
a month prior to any month after 1972 for which a general benefit in- 
crease under this title (as defined in section 215 (i) (3)) or a benefit 
increase under section 215 (i) becomes effective, the benefit amount of 
such individual as computed under paragraph (2) without regard to 
the reduction specified in subparagraph (B) thereof shall be increased 
by the percentage increase applicable for such benefit increase, prior 



Sec. 202 (m) 



50 



to the application of subsection (q) (1) pursuant to paragraph (2) (B) 
and subsection (q) (4). 

Termination of Benefits Upon Deportation of Primary Beneficiary 

(n) (1) If any individual is (after the date of enactment of this sub- 
section) deported under paragraph (1), (2), (4), (5), (6), (7), (10), 
(11), (12), (14), (15), (16), (17), or (18) of section 241(a) of the 
Immigration and Nationality Act, then, notwithstanding any other 
provisions of this title — 

(A) no monthly benefit under this section or section 223 shall be 
paid to such individual, on the basis of his wages and self-employ- 
ment income, for any month occurring (i) after the month in 
which the Secretary is notified by the Attorney General that such 
individual has been so deported, and (ii) before the month in 
which such individual is thereafter lawfully admitted to the 
United States for permanent residence. 

(B) if no benefit could be paid to such individual (or if no 
benefit could be paid to him if he were alive) for any month by 
reason of subparagraph ( A) , no monthly benefit under this section 
shall be paid, on the basis of his wages and self-employment in- 
come, for such month to any other person who is not a citizen of 
the United States and is outside the United States for any part of 
such month, and 

(C) no lump-sum death payment shall be made on the basis of 
such individual's wages and self-employment income if he dies 

(i) in or after the month in which such notice is received, and 

(ii) before the month in which he is thereafter lawfully admitted 
to the United States for permanent residence. 

Section 203 (b), (c), and (d) of this Act shall not apply with respect 
to any such individual for any month for which no monthly benefit 
may be paid to him by reason of this paragraph. 

(2) As soon as practicable after the deportation of any individual 
under any of the paragraphs of section 241(a) of the Immigration 
and Nationality Act enumerated in paragraph (1) in this subsection, 
the Attorney General shall notify the Secretary of such deportation. 

Application for Benefits by Survivors of Members and Former Members of the 

Uniformed Services 

(o) In the case of any individual who would be entitled to benefits 
under subsection (d), (e), (g),or (h), upon filing proper application 
therefor, the filing with the Administrator of Veterans' Affairs by 
or on behalf of such individual of an application for such benefits, on 
the form described in section 3005 of title 38, United States Code, 
shall satisfy the requirement of such subsection (d), (e), (g), or (h) 
that an application for such benefits be filed. 



51 



Sec. 202(q) 



Extension of Period for Filing Proof of Support and Applications for Lump-Sum 

Death Payment 

(p) In any case in which there is a failure — 

(1) to file proof of support under subparagraph (C) of sub- 
section (c)(1), clause (i) or (ii) of subparagraph (D) of sub- 
section (f)(1), or subparagraph (B) of subsection (h)(1), or 
under clause (B) of subsection (f) (1) of this section as in effect 
prior to the Social Security Act Amendments of 1950, within 
the period prescribed by such subparagraph or clause, or 

(2) to file, in the case of a death after 1946, application for a 
lump-sum death payment under subsection (i) , or under subsection 
(g) of this section as in effect prior to the Social Security Act 
Amendments of 1950, within the period prescribed by such sub- 
section, 

any such proof or application, as the case may be, which is filed after 
the expiration of such period shall be deemed to have been filed within 
such period if it is shown to the satisfaction of the Secretary that there 
was good cause for failure to file such proof or application within 
such period. The determination of what constitutes good cause for 
purposes of this subsection shall be made in accordance with regula- 
tions of the Secretary. 

Reduction of Benefit Amounts for Certain Beneficiaries 

(q) (1) If the first month for which an individual is entitled to an 
old-age, wife's, husband's, widow's, or widower's insurance benefit is 
a month before the month in which such individual attains retirement 
age, the amount of such benefit for such month and for any subse- 
quent month shall, subject to the succeeding paragraphs of this sub- 
section, be reduced by — 

(A) % of 1 percent of such amount if such benefit is an old- 
age insurance benefit, 2 % 6 of 1 percent of such amount if such 
benefit is a wife's or husband's insurance benefit, or !% of 1 per- 
cent of such amount if such benefit is a widow's or widower's 
insurance benefit, multiplied by — 

(B) (i) the number of months in the reduction period for such 
benefit (determined under paragraph (6)(A)),if such benefit is 
for a month before the month in which such individual attains 
retirement age, or 

(ii) if less, the number of such months in the adjusted reduction 
period for such benefit (determined under paragraph (7)), if 
such benefit is (I) for the month in which such individual attains 
age 62, or (II) for the month in which such individual attains 
retirement age ; 

and in the case of a widow or widower whose first month of entitle- 
ment to a widow's or widower's insurance benefit is a month before 



Sec. 202(q) 



52 



the month in which such widow or widower attains age 60, such bene- 
fit, reduced pursuant to the preceding provisions of this paragraph 
(and before the application of the second sentence of paragraph (8) ), 
shall be further reduced by — 

(C) 4 %4o of 1 percent of the amount of such benefit, multiplied 
by- >. " : »fe 

(D) (i) the number of months in the additional reduction 
period for such benefit (determined under paragraph (6) (B) ), if 
such benefit is for a month before the month in which such indi- 
vidual attains age 62, or 

(ii) if less, the number of months in the additional adjusted 
reduction period for such benefit (determined under paragraph 
(7)), if such benefit is for the month in which such individual 
attains age 62 or any month thereafter. 

(2) If an individual is entitled to a disability insurance benefit for 
a month after a month for which such individual was entitled to an 
old-age insurance benefit, such disability insurance benefit for each 
month shall be reduced by the amount such old-age insurance benefit 
would be reduced under paragraphs (1) and (4) for such months had 
such individual attained age 65 in the first month for which he most 
recently became entitled to a disability insurance benefit. 

(3) (A) If the first month for Avhich an individual both is entitled 
to a wife's, husband's, widow's, or widower's insurance benefit and 
has attained age 62 (in the case of a wife's or husband's insurance 
benefit) or age 50 (in the case of a widow's or widower's insurance 
benefit) is a month for which such individual is also entitled to — 

(i) an old-age insurance benefit (to which such individual was 
first entitled for a month before he attains age 65), or 

(ii) a disability insurance benefit, 

then in lieu of any reduction under paragraph (1) (but subject to 
the succeeding paragraphs of this subsection) such wife's, husband's, 
widow's, or widower's insurance benefit for each month shall be re- 
duced as provided in subparagraph (B), (C), or (D). 

( B ) For any month for which such individual is entitled to an old- 
age insurance benefit and is not entitled to a disability insurance bene- 
fit, such individual's wife's, or husband's insurance benefit shall be 
i educed by the sum of — 

(i) the amount by which such old-age insurance benefit is re- 
duced under paragraph (1) for such month, and 

(ii) the amount by which such wife's or husband's insurance 
benefit would be reduced under paragraph (1) for such month 
if it were equal to the excess of such wife's or husband's insurance 
benefit (before reduction under this subsection) over such old- 
age insurance benefit (before reduction under this subsection). 



53 



Sec. 202(q) 



(C) For any month for which such individual is entitled to a dis- 
ability insurance benefit, such individual's wife's, husband's, widow's, 
or widower's insurance benefit shall be reduced by the sum of — 

(i) the amount by which such disability insurance benefit is re- 
duced under paragraph (2) for such month (if such paragraph 
applied to such benefit) , and 

(ii) the amount by which such wife's, husband's, widow's, or 
widower's insurance benefit would be reduced under paragraph 
(1) for such month if it were equal to the excess of such wife's, 
husband's, widow's, or widower's insurance benefit (before re- 
duction under this subsection) over such disability insurance 
benefit (before reduction under this subsection). 

(D) For any month for which such individual is entitled neither 
to an old-age insurance benefit nor to a disability insurance benefit, 
such individual's wife's, husband's, widow's, or widower's insurance 
benefit shall be reduced by the amount by which it would be reduced 
under paragraph ( 1 ) . 

(E) If the first month for which an individual is entitled to an old- 
age insurance benefit (whether such first month occurs before, with, 
or after the month in which such individual attains the age of 65) is 
a month for which such individual is also (or would, but for sub- 
section (e) (1) in the case of a widow or surviving divorced wife or 
subsection (f ) (1) in the case of a widower, be) entitled to a widow's or 
widower's insurance benefit to which such individual was first en- 
titled for a month before she or he attained retirement age, then 
such old-age insurance benefit shall be reduced by whichever of the 
following is the larger : 

(i) the amount by which (but for this subparagraph) such 
old-age insurance benefit would have been reduced under para- 
graph (1), or 

(ii) the amount equal to the sum of (I) the amount by which 
such widow's or widower's insurance benefit would be reduced 
under paragraph (1) if the period specified in paragraph (6) (A) 
ended with the month before the month in which she or he at- 
tained age 62 and (II) the amount by which such old-age insur- 
ance benefit would be reduced under paragraph (1) if it were 
equal to the excess of such old-age insurance benefit (before re- 
duction under this subsection over such widow's or widower's 
insurance benefit (before reduction under this subsection) . 

(F) If the first month for which an individual is entitled to a dis 1 
ability insurance benefit (when such first month occurs with or after 
the month in which such individual attains the age of 62) is a month 
for which such individual is also (or would, but for subsection (e) (1) 
m the case of a widow or surviving divorced wife or subsection (f ) (1) 
in the case of a widower, be) entitled to a widow's or widower's in- 



Sec. 202(q) 



54 



surance benefit to which such individual was first entitled for a month 
before she or he attained retirement age, then such disability insurance 
benefit for each month shall be reduced by whichever of the follow- 
ing is larger: 

(i) the amount by which (but for this subparagraph) such dis- 
ability insurance benefit would have been reduced under para- 
graph (2), or 

(ii) the amount equal to the sum of (I) the amount by which 
such widow's or widower's insurance benefit would be reduced 
under paragraph (1) if the period specified in paragraph (6) (A) 
ended with the month before the month in which she or he at- 
tained age 62 and (II) the amount by which such disability insur- 
ance benefit would be reduced under paragraph (2) if it were 
equal to the excess of such disability insurance benefit (before 
reduction under this subsection) over such widow's or widower's 
insurance benefit (before reduction under this subsection). 

(G) If the first month for which an individual is entitled to a 
disability insurance benefit (when such first month occurs before the 
month in which such individual attains the age of 62) is a month for 
which such individual is also (or would, but for subsection (e) (1) in 
the case of a widow or surviving divorced wife or subsection (f ) (1) 
in the case of a widower, be) entitled to a widow's or widower's in- 
surance benefit, then such disability insurance benefit for each month 
shall be reduced by the amount such widow's insurance benefit would 
be reduced under paragraphs (1) and (4) for such month as if the 
period specified in paragraph (6) (A) (or, if such paragraph does not 
apply, the period specified in paragraph (6)(B)) ended with the 
month before the first month for which she or he most recently be- 
came entitled to a disability insurance benefit. 

(H) Notwithstanding subparagraph (A) of this paragraph, if the 
first month for which an individual is entitled to a widow's or widow- 
er's insurance benefit is a month for which such individual is also en- 
titled to an old-age insurance benefit to which such individual was 
first entitled for a month before she or he became entitled to a widow's 
or widower's benefit, the reduction in such widow's or widower's insur- 
ance benefit shall be determined under paragraph (1). 

(4) If- 

(A) an individual is or was entitled to a benefit subject to re- 
duction under paragraph (1) or (3) of this subsection, and 

(B) such benefit is increased by reason of an increase in the 
primary insurance amount of the individual on whose wages and 
self-employment income such benefit is based, 

then the amount of the reduction of such benefit for each month shall 
be computed separately (under paragraph (1) or (3), whichever ap- 
plies) for the portion of such benefit which constitutes such benefit 



55 



Sec. 202(q) 



before any increase described in subparagraph (B), and separately 
(under paragraph (1) or (3), whichever applies to the benefit being in- 
creased) for each such increase. For purposes of determining the 
amount of the reduction under paragraph (1) or (3) in any such in- 
crease, the reduction period and the adjusted reduction period shall 
be determined as if such increase were a separate benefit to which 
such individual was entitled for and after the first month for which 
such increase is effective. 

(5) (A) No wife's insurance benefit shall be reduced under this sub- 
section — 

(i) for any month before the first month for which there is in 
effect a certificate filed by her with the Secretary, in accordance 
with regulations prescribed by him, in which she elects to receive 
wife's insurance benefits reduced as provided in this subsection, or 

(ii) for any month in which she has in her care (individually 
or jointly with the person on whose wages and self -employment 
income her wife's insurance benefit is based) a child of such person 
entitled to child's insurance benefits. 

(B) Any certificate described in subparagraph (A) (i) shall be ef- 
fective for purposes of this subsection ( and for purposes of preventing 
deductions under section 203(c) (2) ) — 

(i) for the month in which it is filed and for any month there- 
after, and 

(ii) for months, in the period designated by the woman filing 
such certificate, of one or more consecutive months (not exceeding 
12) immediately preceding the month in which such certificate is 
filed; 

except that such certificate shall not be effective for any month before 
the month in which she attains age 62, nor shall it be effective for any 
month to which subparagraph (A) (ii) applies. 

(C) If a woman does not have in her care a child described in sub- 
paragraph (A) (ii) in the first month for which she is entitled to a 
wife's insurance benefit, and if such first month is a month before the 
month in which she attains age 65, she shall be deemed to have filed 
in such first month the certificate described in subparagraph (A) (i). 

(D) No widow's insurance benefit for a month in which she has 
in her care a child of her deceased husband (or deceased former hus- 
band) entitled to child's insurance benefits shall be reduced under this 
subsection below the amount to which she would have been entitled had 
she been entitled for such month to mother's insurance benefits on 
the basis of her deceased husband's (or deceased former husband's) 
wages and self -employment income. 

(6) For the purposes of this subsection — 

(A) the "reduction period" for an individual's old-age, wife's, 
husband's, widow's, or widower's insurance benefit is the period — 



Sec. 202(q) 



56 



(i) beginning — 

(I) in the case of an old-age or husband's insurance 
benefit, with the first day of the first month for which 
such individual is entitled to such benefit, or 

(II) in the case of a wife's insurance benefit, with the 
first day of the first month for which a certificate de- 
scribed in paragraph (5)(A)(i) is effective, or 

(III) in the case of a widow's or widower's insurance 
benefit, with the first day of the first month for which 
such individual is entitled to such benefit or the first day 
of the month in which such individual attains age 60, 
whichever is the later, and 

(ii) ending with the last day of the month before the 
month in which such individual attains retirement age; and 

(B) the "additional reduction period" for an individual's 
widow's, or widower's insurance benefit is the period — 

(i) beginning with the first day of the first month for 
which such individual is entitled to such benefit, but only if 
such individual has not attained age 60 in such first month, 
and 

(ii) ending with the last day of the month before the 
month in which such individual attains age 60. 

(7) For purposes of this subsection the "adjusted reduction period" 
for an individual's old-age, wife's, husband's, widow's, or widower's 
insurance benefit is the reduction period prescribed in paragraph (6) 
(A) for such benefit, and the "additional adjusted reduction period" 
for an individual's, widow's, or widower's, insurance benefit is the addi- 
tional reduction period prescribed by paragraph (6) (B) for such 
benefit, excluding from each such period — 

(A) any month in which such benefit was subject to deduc- 
tions under section 203(b), 203(c) (1), 203(d) (1), or 222(b), 

(B) in the case of wife's insurance benefits, any month in which 
she had in her care (individually or jointly with the person on 
whose wages and self -employment income such benefit is based) 
a child of such person entitled to child's insurance benefits, 

(C) in the case of wife's or husband's insurance benefits, any 
month for which such individual was not entitled to such bene- 
fits because the spouse on whose wages and self-employment in- 
come such benefits were based ceased to be under a disability, 

(D) in the case of widow's insurance benefits, any month in 
which the reduction in the amount of such benefit was determined 
under paragraph (5) (D), 

(E) in the case of widow's or widower's insurance benefits, any 
month before the month in which she or he attained age 62, and 
also for any later month before the month in which he attained re- 



57 



Sec. 202(s) 



tirement age, for which she or he was not entitled to such bene- 
fit because of the occurrence of an event that terminated her or his 
entitlement to such benefits, and 

(F) in the case of old-age insurance benefits, any month for 
which such individual was entitled to a disability insurance benefit. 

(8) This subsection shall be applied after reduction under section 
203(a) and after application of section 215(g). If the amount of any 
reduction computed under paragraph (1), (2), or (3) is not a multi- 
ple of $0.10, it shall be reduced to the next lower multiple of $0.10. 

( 9 ) For purposes of this subsection, the term "retirement age" means 
age 65. 

Presumed Filing of Application by Individuals Eligible for Old-Age Insurance 
Benefits and for Wife's or Husband's Insurance Benefits 

(r) (1) If the first month for which an individual is entitled to an 
old-age insurance benefit is a month before the month in which such 
individual attains age 65, and if such individual is eligible for a wife's 
or husband's insurance benefit for such first month, such individual 
shall be deemed to have filed an application in such month for wife's 
or husband's insurance benefits. 

(2) If the first month for which an individual is entitled to a wife's 
or husband's insurance benefit reduced under subsection (q) is a month 
before the month in which such individual attains age 65, and if such 
individual is eligible (but for section 202 (k) (4) ) for an old-age insur- 
ance benefit for such first month, such individual shall be deemed to 
have filed an application for old-age insurance benefits — 

(A) in such month, or 

(B) if such individual is also entitled to a disability insurance 
benefit for such month, in the first subsequent month for which 
such individual is not entitled to a disability insurance benefit. 

(3) For purposes of this subsection, an individual shall be deemed 
eligible for a benefit for a month if, upon filing application therefor 
in such month, he would be entitled to such benefit for such month. 

Child Aged 18 or Over Attending School 

(s)(l) For the purposes of subsections (b)(1), (g)(1), (q)(5), 
and (q) (7) of this section and paragraphs (2), (3), and (4) of sec- 
tion 203(c), a child who is entitled to child's insurance benefits under 
subsection (d) for any month, and who has attained the age of 18 but 
is not in such month under a disability (as defined in section 223(d) ) 
shall be deemed not entitled to such benefits for such month, unless 
he was under such a disability in the third month before such month. 

(2) Subsection (f)(4), and so much of subsections (b)(3), 
(d) (5), (e) (3), (g) (3), and (h) (4), of this section as precedes the 
semicolon, shall not apply in the case of any child unless such child, at 
the time of the marriage referred to therein, was under a disability 



64-310 O - 76 - 5 



Sec. 202(t) 



58 



(as defined in section 223(d)) or had been under such a disability 
in the third month before the month in which such marriage occurred. 

(3) Subsections (c) (2) (B) and (f ) (2) (B) of this section, so much 
of subsections (b)(3), (d)(5), (e)(3), (g)(3), and (h)(4) of this 
section as follows the semicolon, the last sentence of subsection (c) of 
section 203, subsection (f) (1) (C) of section 203, and subsections 
(b)(3)(B), (c)(6)(B), (f)(3)(B), and (g)(6)(B) of section 216 
shall not apply in the case of any child with respect to any month 
referred to therein unless in such month or the third month prior 
thereto such child was under a disability (as defined in section 
223(d)). 

Suspension of Benefits of Aliens Who Are Outside the United States 

(t) (1) Notwithstanding any other provision of this title, no 
monthly benefits shall be paid under this section or under section 223 
to any individual who is not a citizen or national of the United States 
for any month which is — 

(A) after the sixth consecutive calendar month during all of 
which the Secretary finds, on the basis of information furnished 
to him by the Attorney General or information which otherwise 
comes to his attention, that such individual is outside the United 
States, and 

(B) prior to the first month thereafter for all of which such 
individual has been in the United States. 

For purposes of the preceding sentence, after an individual has been 
outside the United States for any period of thirty consecutive days he 
shall be treated as remaining outside the United States until he has 
been in the United States for a period of thirty consecutive days. 

(2) Paragraph (1) shall not apply to any individual who is a citi- 
zen of a foreign country which the Secretary finds has in effect a social 
insurance or pension system which is of general application in such 
country and under which — 

(A) periodic benefits, or the actuarial equivalent thereof, are 
paid on account of old-age, retirement, or death, and 

(B) individuals who are citizens of the United States but not 
citizens of such foreign country and who qualify for such benefits 
are permitted to receive such benefits or the actuarial equivalent 
thereof while outside such foreign country without regard to 
the duration of the absence. 

(3) Paragraph (1) shall not apply in any case where its application 
would be contrary to any treaty obligation of the United States in 
effect on the date of the enactment of this subsection. 

(4) Paragraph (1) shall not apply to any benefit for any month if — 
(A) not less than forty of the quarters elapsing before such 

month are quarters of coverage for the individual on whose wages 
and self-employment income such benefit is based, or 



59 



Sec. 202(t) 



(B) the individual on whose wages and self -employment in- 
come such benefit is based has, before such month, resided in the 
United States for a period or periods aggregating ten years or 
more, or 

(C) the individual entitled to such benefit is outside the United 
States while in the active military or naval service of the United 
States, or 

(D) the individual on whose wages and self -employment in- 
come such benefit is based died, before such month, either (i) 
while on active duty or inactive duty training (as those terms are 
defined in section 210(1) , (2) and (3) as a member of a uniformed 
service (as defined in section 210 (m)), or (ii) as the result of a 
disease or injury which the Administrator of Veterans' Affairs 
determines was incurred or aggravated in line of duty while on 
active duty (as defined in section 210(1) (2) ), or an injury which 
he determines was incurred or aggravated in line of duty while 
on inactive duty training (as defined in section 210(1) (3)), as 
a member of a uniformed service (as defined in section 210 (m) ), 
if the Administrator determines that such individual was dis- 
charged or released from the period of such active duty or in- 
active duty training under conditions other than dishonorable, 
and if the Administrator certifies to the Secretarv his determina- 
tions with respect to such individual under this clause, or 

(E) the individual on whose employment such benefit is based 
had been in service covered bv the Railroad Retirement Act which 
was treated as employment covered by this Act pursuant to the 
provisions of section 5(k)(l) of the Railroad Retirement Act; 

except that subparagraphs (A) and (B) of this paragraph shall not 
apply in the case of any individual who is a citizen of a foreign 
country that has in effect a social insurance or pension system which 
is of general application in such country and which satisfies subpara- 
graph (A) but not subparagraph (B) of paragraph (2), or who is 
a citizen of a foreign country that has no social insurance or pension 
system of general application if at any time within five years prior 
to the month in which the Social Security Amendments of 1967 are 
enacted (or the first month thereafter for which his benefits are sub- 
ject to suspension under paragraph (1)) payments to individuals re- 
siding in such country were withheld by the Treasury Department 
under the first section of the Act of October 9, 1940 (31 U.S.C. 123). 

(5) No person who is, or upon application would be, entitled to a 
monthly benefit under this section for December 1956 shall be de- 
prived, by reason of paragraph (1), of such benefit or any other bene- 
fit based on the wages and self-employment income of the individual 
on whose wages and self-employment income such monthly benefit for 
December 1956 is based. 



Sec. 202(u) 



60 



(6) If an individual is outside the United States when he dies and 
no benefit may, by reason of paragraph (1) or (10) be paid to him for 
the month preceding the month in which he dies, no lump-sum death 
payment may be made on the basis of such individual's wages and self- 
employment income. 

(7) Subsections (b), (c), and (d) of section 203 shall not apply 
with respect to any individual for any month for which no monthly 
benefit may be paid to him by reason of paragraph (1) of this sub- 
section. 

(8) The Attorney General shall certify to the Secretary such infor- 
mation regarding aliens who depart from the United States to any 
foreign country (other than a foreign country which is territorially 
continguous to the continental United States) as may be necessary to 
enable the Secretary to carry out the purposes of this subsection and 
shall otherwise aid, assist, and cooperate with the Secretary in obtain- 
ing such other information as may be necessary to enable the Secretary 
to carry out the purposes of this subsection. 

(9) No payments shall be made under part A of title XVIII with 
respect to items or services furnished to an individual in any month 
for which the prohibition in paragraph (1) against payment of bene- 
fits to him is applicable (or would be if he were entitled to any such 
benefits). 

(10) Notwithstanding any other provision of this title, no monthly 
benefits shall be paid under this section or under section 223, for any 
month beginning after June 30, 1968, to an individual who is not a 
citizen or national of the United States and who resides during such 
month in a foreign country if payments for such month to individuals 
residing in such country are withheld by the Treasury Department 
under the first section of the Act of October 9, 1940 (31 U.S.C. 123). 

Effect of Conviction of Subversive Activities, etc. 

(u) (1) If any individual is convicted of any offense (committed 
after the date of the enactment of this subsection) under — 

(A) chapter 37 (relating to espionage and censorship) , chapter 
105 (relating to sabotage), or chapter 115 (relating to treason, 
sedition, and subversive activities) of title 18 of the United States 
Code, or 

(B) section 4, 112, or 113 of the Internal Security Act of 1950, 
as amended, 

then the court may, in addition to all other penalties provided by law, 
impose a penalty that in determining whether any monthly insurance 
benefit under this section or section 223 is payable to such individual 
for the month in which he is convicted or for any month thereafter, in 
determining the amount of any sucli benefit payable to such individual 
for any such month, and in determining whether such individual is 



61 



Sec. 202(w) 



entitled to insurance benefits under part A of title XVIII for any such 
month, there shall not be taken into account — 

(C) any wages paid to such individual or to any other individ- 
ual in the calendar quarter in which such conviction occurs or in 
any prior calendar quarter, and 

(D) any net earnings from self -employment derived by such 
individual or by any other individual during a taxable year in 
which such conviction occurs or during any prior taxable year. 

(2) As soon as practicable after an additional penalty has, pursuant 
to paragraph (1), been imposed with respect to any individual, the 
Attorney General shall notify the Secretary of such imposition. 

(3) If any individual with respect to whom an additional penalty 
has been imposed pursuant to paragraph (1) is granted a pardon of 
the offense by the President of the United States, such additional 
penalty shall not apply for any month beginning after the date on 
which such pardon is granted. 

Waiver of Benefits 

(v) Notwithstanding any other provisions of this title, in the case 
of any individual who files a waiver pursuant to section 1402(h) of the 
Internal Revenue Code of 1954 and is granted a tax exemption there- 
under, no benefits or other payments shall be payable under this title 
to him, no payments shall be made on his behalf under part A of title 
XVIII, and no benefits or other payments under this title shall be 
payable on the basis of his wages and self -employment income to any 
other person, after the filing of such waiver ; except that, if thereafter 
such individual's tax exemption under such section 1402(h) ceases to 
be effective, such waiver shall cease to be applicable in the case of bene- 
fits and other payments under this title and part A of title XVIII 
to the extent based on his self -employment income for and after the 
first taxable year in which such tax exemption ceases to be effective 
and on his wages for and after the calendar year (if any) which 
begins in or with the beginning of such taxable year. 

Increase in Old-Age Insurance Benefit Amounts on Account of Delayed 

Retirement 

(w) (1) If the first month for which an old-age insurance benefit 
becomes payable to an individual is not earlier than the month in which 
such individual attains age 65 (or his benefit payable at such age is 
not reduced under subsection (q)), the amount of the old-age insur- 
ance benefit (other than a benefit based on a primary insurance amount 
determined under section 215 (a) (3) ) which is payable without regard 
to this subsection to such individual shall be increased by — 

(A) one-twelfth of 1 percent of such amount, multiplied by 



Sec. 203(a) 



62 



(B) the number (if any) of the increment months for such 
individual. 

(2) For purposes of this subsection, the number of increment months 
for any individual shall be a number equal to the total number of the 
months — 

(A) which have elapsed after the month before the month in 
which such individual attained age 65 or (if later) December 
1970 and prior to the month in which such individual attained 
age 72, and 

(B) with respect to which — 

(i) such individual was a fully insured individual (as 
defined in section 214(a) ), and 

(ii) such individual either was not entitled to an old-age 
insurance benefit or suffered deductions under section 203 (b) 
or 203(c) in amounts equal to the amount of such benefit. 

(3) For purposes of applying the provisions of paragraph (1), a 
determination shall be made under paragraph (2) for each year, begin- 
ning with 1972, of the total number of an individual's increment 
months through the year for which the determination is made and the 
total so determined shall be applicable to such individual's old-age 
insurance benefits beginning with benefits for January of the year fol- 
lowing the year for which such determination is made; except that 
the total number applicable in the case of an individual who attains 
age 72 after 1972 shall be determined through the month before the 
month in which he attains such age and shall be applicable to his old- 
age insurance benefit beginning with the month in which he attains 
such age. 

(4) This subsection shall be applied after reduction under section 
203(a). 

(5) If an individual's primary insurance amount is determined 
under paragraph (3) of section 215(a) and, as a result of this sub- 
section, he would be entitled to a higher old-age insurance benefit if 
his primary insurance amount were determined under section 215(a) 
without regard to such paragraph, such individual's old-age insurance 
benefit based upon his primary insurance amount determined under 
such paragraph shall be increased by an amount equal to the difference 
between such benefit and the benefit to which he would be entitled if 
his primary insurance amount were determined under such section 
without regard to such paragraph. 

Reduction of Insurance Benefits 

Maximum Benefits 

Sec. 203. (a) Whenever the total monthly benefits to which indi- 
viduals are entitled under sections 202 and 223 for a month on the 
basis of the wages and self-employment income of an insured indi- 



63 



Sec. 203(a) 



vidual is greater than the amount appearing in column V of the table 
in (or deemed to be in) section 215(a) on the line on which appears 
in column IV such insured individual's primary insurance amount, 
such total of benefits shall be reduced to such amount ; except that — 

(1) when any of such individuals so entitled would (but for 
the provisions of section 202(k) (2) (A) ) be entitled to child's 
insurance benefits on the basis of the wages and self-employment 
income of one or more other insured individuals, such total of 
benefits shall not be reduced to less than the smaller of: (A) the 
sum of the maximum amounts of benefits payable on the basis of 
the wages and self-employment income of all such insured indi- 
viduals, or (B) the last figure in column V of the table appearing 
in section 215(a), or 

(2) when two or more persons were entitled (without the ap- 
plication of section 202(j)(l) and section 223(b) to monthly 
benefits under section 202 or 223 for January 1971 or any prior 
month on the basis of the wages and self -employment income of 
such insured individual and the provisions of this subsection as in 
effect for any such month were applicable in determining the 
benefit amount of any persons on the basis of such wages and self- 
employment income, the total of benefits for any month after 
January 1971 shall not be reduced to less than the largest of — 

(A) the amount determined under this subsection without 
regard to this paragraph, 

( B ) the largest amount which has been determined for any 
month under this subsection for persons entitled to monthly 
benefits on the basis of such insured individual's wages and 
self -employment income, or 

(C) if any persons are entitled to benefits on the basis of 
such wages and self -employment income for the month before 
the effective month (after September 1972) of a general 
benefit increase under this title (as defined in section 
215 (i) (3) ) or a benefit increase under the provisions of sec- 
tion 215 (i), and amount equal to the sum of amounts derived 
by multiplying the benefit amount determined under this title 
(excluding any part thereof determined under section 
202 (w) ) for the month before such effective month (includ- 
ing this subsection, but without the application of section 
222(b), section 202 (q), and subsections (b), (c), and (d) of 
this section), for each such person for such month, by a per- 
centage equal to the percentage of the increase provided under 
such benefit increase (with any such increased amount which 
is not a multiple of $0.10 being rounded to the next higher 
multiple of $0.10) ; 



Sec. 203(a) 



64 



but in any such case (i) paragraph (1) of this subsection shall not 
be applied to such total of benefits after the application of sub- 
paragraph (B) or (C), and (ii) if section 202(k)(2)(A) was 
applicable in the case of any such benefits for a month, and ceases 
to apply for a month after such month, the provisions of sub- 
paragraph (B) or (C) shall be applied, for and after the month 
in which section 202 (k) (2) (A) ceases to apply, as though para- 
graph (1) had not been applicable to such total of benefits for the 
last month for which subparagraph (B) or (C) was applicable, or 

(3) when any of such individuals is entitled to monthly bene- 
fits as a divorced wife under section 202(b) or as a surviving di- 
vorced wife under section 202(e) for any month, the benefit to 
which she is entitled on the basis of the wages and self-employ- 
ment income of such insured individual for such month shall 
be determined without regard to this subsection, and the benefits 
of all other individuals who are entitled for such month to 
monthly benefits under section 202 on the wages and self- 
employment income of such insured individual shall be deter- 
mined as if no such divorced wife or surviving divorced wife were 
entitled to benefits for such month. 

In any case in which benefits are reduced pursuant to the preceding 
provisions of this subsection, such reduction shall be made after any 
deductions under this section and after any deductions under section 
222(b). Whenever a reduction is made under this subsection in the 
total of monthly benefits to which individuals are entitled for any 
month on the basis of the wages and self-employment income of an 
insured individual, each such benefit other than the old-age or dis- 
ability insurance benefit shall be proportionately decreased; except 
that if such total of benefits for such month includes any benefit or 
benefits under section 202(d) which are payable solely by reason 
of section 216(h)(3), the reduction shall be first applied to reduce 
(proportionately where there is more than one benefit so payable) 
the benefits so payable (but not below zero) , 

(4) notwithstanding any other provision of law, when — 

(A) two or more persons are entitled to monthly benefits 
for a particular month on the basis of the wages and self-em- 
ployment income of an insured individual and (for such par- 
ticular month) the provisions of this subsection and section 
202 (q) are applicable to such monthly benefits, and 

(B) such individual's primary insurance amount is in- 
creased for the following month under any provision of this 
title, 

then the total of monthly benefits for all persons on the basis of such 
wages and self -employment income for such particular month, as de- 



65 



Sec. 203(b) 



termined under the provisions of this subsection, shall for purposes 
of determining the total monthly benefits for all persons on the basis 
of such wages and self -employment income for months subsequent to 
such particular month to be considered to have been increased by the 
smallest amount that would have been required in order to assure that 
the total of monthly benefits payable on the basis of such wages and 
self-employment income for any such subsequent month will not be 
less (after the application of the other provisions of this subsection and 
section 202 (q) ) than the total of monthly benefits (after the applica- 
tion of the other provisions of this subsection and section 202 (q)) 
payable on the basis of such wages and self -employment income for 
such particular month, or 

( 5 ) whenever the monthly benefits of such individuals are based 
on an insured individual's primary insurance amount which is 
determined under section 215(a) (3) and such primary insurance 
amount does not appear in column IV of the table in (or deemed 
to be in) section 215(a), the applicable maximum amount in 
column V of such table shall be the amount in such column that 
appears on the line on which the next higher primary insurance 
amount appears in column IV, or, if larger, the largest amount 
determined for such persons under this subsection for any month 
prior to October 1972. 

Deductions on Account of Work 

(b) Deductions, in amounts and at such time or times as the Secre- 
tary shall determine, shall be made from any payment or payments 
under this title to which an individual is entitled, and from any pay- 
ment or payments to which any other persons are entitled on the basis 
of such individual's wages and self -employment income, until the total 
of such deductions equals — 

(1) such individual's benefit or benefits under section 202 for 
any month, and 

(2) if such individual was entitled to old-age insurance benefits 
under section 202(a) for such month, the benefit or benefits of all 
other persons for such month under section 202 based on such 
individual's wages and self -employment income, 

if for such month he is charged with excess earnings, under the pro- 
visions of subsection (f) of this section, equal to the total of benefits 
referred to in clauses (1) and (2). If the excess earnings so charged 
are less than such total benefits, such deductions with respect to such 
month shall be equal only to the amount of such excess earnings. If 
a child who has attained the age of 18 and is entitled to child's insur- 
ance benefits, or a person who is entitled to mother's insurance bene- 
fits, is married to an individual entitled to old-age insurance benefits 
under section 202(a), such child or such person, as the case may be, 



Sec. 203(c) 



66 



shall, for the purposes of this subsection and subsection (f ) , be deemed 
to be entitled to such benefits on the basis of the wages and self- 
employment income of such individual entitled to old-age insurance 
benefits. If a deduction has already been made under this subsection 
with respect to a person's benefit or benefits under section 202 for a 
month, he shall be deemed entitled to payments under such section 
for such month for purposes of further deductions under this sub- 
section, and for purposes of charging of each person's excess earnings 
under subsection (f), only to the extent of the total of his benefits 
remaining after such earlier deductions have been made. For purposes 
of this subsection and subsection (f ) — 

(A) an individual shall be deemed to be entitled to payments 
under section 202 equal to the amount of the benefit or benefits to 
which he is entitled under such section after the application of 
subsection (a) of this section, but without the application of the 
penultimate sentence thereof ; and 

(B) if a deduction is made with respect to an individual's 
benefit or benefits under section 202 because of the occurence in 
any month of an event specified in subsection (c) or (d) of this 
section or in section 222(b), such individual shall not be consid- 
ered to be entitled to any benefits under such section 202 for such 
month. 

Deductions on Account of Noncovered Work Outside the United States or 

Failure To Have Child in Care 

(c) Deductions, in such amounts and at such time or times as the 
Secretary shall determine, shall be made from any payment or pay- 
ments under this title to which an individual is entitled, until the total 
of such deductions equals such individual's benefits or benefit under 
section 202 for any month — 

(1) in which such individual is under the age of seventy-two 
and on seven or more different calendar days of which he engaged 
in noncovered remunerative activity outside the United States ; or 

(2) in which such individual, if a wife under age sixty-five 
entitled to a wife's insurance benefits, did not have in her care 
(individually or jointly with her husband) a child of her hus- 
band entitled to a child's insurance benefit and such wife's insur- 
ance benefit for such month was not reduced under the provisions 
of section 202 (q) ; or 

(3) in which such individual, if a widow entitled to a mother's 
insurance benefit, did not have in her care a child of her deceased 
husband entitled to a child's insurance benefit ; or 

(4) in which such an individual, if a surviving divorced mother 
entitled to a mother's insurance benefit, did not have in her care a 
child of her deceased former husband who (A) is her son, daugh- 
ter, or legally adopted child and (B) is entitled to a child's in- 



67 



Sec. 203(e) 



surance benefit on the basis of the wages and self -employment 

income of her deceased former hubsand. 
For purposes of paragraphs (2), (3), and (4) of this subsection, a 
child shall not be considered to be entitled to a child's insurance benefit 
for any month in which paragraph (1) of section 202 (s) applies or an 
event specified in sections 222(b) occurs with respect to such child. 
Subject to paragraph (3) of such section 202 (s), no deductions shall 
be made under this subsection from any child's insurance benefit for 
the month in which the child entitled to such benefit attained the age 
of eighteen or any subsequent month; nor shall any deduction be 
made under this subsection from any widow's insurance benefits for 
any month in which the widow or surviving divorced wife is entitled 
and has not attained age 65 (but only if she became so entitled 
prior to attaining age 60) , or from any widower's insurance benefit for 
any month in which the widower is entitled and has not attained age 
65 (but only if he became so entitled prior to attaining age 60). 

Deductions From Dependents' Benefits on Account of Noncovered Work Out- 
side the United States by Old-Age Insurance Beneficiary 

(d) (1) Deductions shall be made from any wife's, husband's, or 
child's insurance benefit, based on the wages and self-employment 
income of an individual entitled to old-age insurance benefits, to which 
a wife, divorced wife, husband, or child is entitled, until the total of 
such deduction equals such wife's, husband's, or child's insurance 
benefit or benefits under section 202 for any month in which such 
individual is under the age of seventy-two and on seven or more 
different calendar days of which he engaged in noncovered remunera- 
tive activity outside the United States. 

(2) Deductions shall be made from any child's insurance benefit to 
which a child who has attained the age of eighteen is entitled, or from 
any mother's insurance benefit to which a person is entitled, until the 
total of such deductions equals such child's insurance benefit or bene- 
fits or mother's insurance benefit or benefits under section 202 for any 
month in which such child or person entitled to mother's insurance 
benefits is married to an individual who is entitled to old-age insur- 
ance benefits and on seven or more different calendar days of which 
such individual engaged in noncovered remunerative activity outside 
the United States. 

Occurrence of More Than One Event 

(e) If more than one of the events specified in subsections (c) and 
(d) and section 222(b) occurs in any one month which would occasion 
deductions equal to a benefit for such month, only an amount equal 
to such benefit shall be deducted. 



Sec. 203(f) 



68 



Months to Which Earnings Are Charged 

(f) For purposes of subsection (b) — 

(1) The amount of an individual's excess earnings (as defined 
in paragraph (3) ) shall be charged to months as follows: There 
shall be charged to the first month of such taxable year an amount 
of his excess earnings equal to the sum of the payments to which 
he and all other persons are entitled for such month under section 
202 on the basis of his wages and self -employment income (or the 
total of his excess earnings if such excess earnings are less than 
such sum), and the balance, if any, of such excess earnings shall 
be charged to each succeeding month in such year to the extent, in 
the case of each such month, of the sum of the payments to which 
such individual and all other persons are entitled for such month 
under section 202 on the basis of his wages and self-employment 
income, until the total of such excess has been so charged. Where 
an individual is entitled to benefits under section 202(a) and other 
persons are entitled to benefits under section 202(b), (c), or (d) 
on the basis of the wages and self-employment income of such 
individual, the excess earnings of such individual for any taxable 
year shall be charged in accordance with the provisions of this 
subsection before the excess earnings of such persons for a taxable 
year are charged to months in such individual's taxable year. 
Notwithstanding the preceding provisions of this paragraph, but 
subject to section 202 (s), no part of the excess earnings of an in- 
dividual shall be charged to any month (A) for which such indi- 
vidual was not entitled to a benefit under this title, (B) in which 
such individual was age seventy-two or over, (C) in which such 
individual, if a child entitled to child's insurance benefits, has 
attained the age of 18, (D) for which such individual is entitled to 
widow's insurance benefits and has not attained age 65 (but only if 
she became so entitled prior to attaining age 60) or widower's in- 
surance benefits and has not attained age 65 (but only if he became 
so entitled prior to attaining age 60), or (E) in which such 
individual did not engage in self -employment and did not render 
services for wages (determined as provided in paragraph (5) of 
this subsection) of more than $200 or the exempt amount as de- 
termined under paragraph (8). 1 

(2) As used in paragraph (1), the term "first month of such 
taxable year" means the earliest month in such year to which the 
charging of excess earnings described in such paragraph is not 
prohibited by the application of clauses (A), (B), (C), (D), and 
(E) thereof. 

(3) For purposes of paragraph (1) and subsection (h), an in- 
dividual's excess earnings for a taxable year shall be 50 per centum 



1 $210 for 1975 ; $230 for 1976. 



69 



Sec. 203(f) 



of his earnings for such year in excess of the product of $200 or 
the exempt amount as determined under paragraph (8), 1 multi- 
plied by the number of months in such year, except that, in deter- 
mining an individual's excess earnings for the taxable year in 
which he attains age 72, there shall be excluded any earnings of 
such individual for the month in which he attains such age and 
any subsequent month (with any net earnings or net loss from 
self-employment in such year being prorated in an equitable 
manner under regulations of the Secretary). The excess earn- 
ings as derived under the preceding sentence, if not a multiple of 
$1, shall be reduced to the next lower multiple of $1. 

(4) For purposes of clause (E) of paragraph (1) — 

(A) An individual will be presumed, with respect to any 
month, to have been engaged in self-employment in such 
month until it is shown to the satisfaction of the Secretary 
that such individual rendered no substantial services in such 
month with respect to any trade or business the net income or 
loss of which is includible in computing (as provided in 
paragraph (5) of this subsection) his net earnings or net 
loss from self-employment for any taxable year. The Secre- 
tary shall by regulations prescribe the methods and criteria 
for determining whether or not an individual has rendered 
substantial services with respect to any trade or business. 

(B) An individual will be presumed, with respect to any 
month, to have rendered services for wages (determined as 
provided in paragraph (5) of this subsection) of more than 
$200 or the exempt amount as determined under paragraph 
(8) until it is shown to the satisfaction of the Secretary 
that such individual did not render such services in such 
month for more than such amount. 

(5) (A) An individual's earnings for a taxable year shall be 
(i) the sum of his wages for services rendered in such year and 
his net earnings from self -employment for such year, minus (ii) 
any net loss from self -employment for such year. 

(B) For purposes of this section — 

(i) an individual's net earnings from self -employment for 
any taxable year shall be determined as provided in section 
211, except that paragraphs (1), (4), and (5) of section 211 
(c) shall not apply and the gross income shall be computed 
by excluding the amounts provided by subparagraph (D), 
and 

(ii) an individual's net loss from self -employment for any 
taxable year is the excess of the deductions (plus his distribu- 
tive share of loss described in sections 702(a) (9) of the In- 



1 $210 for 1975 ; $230 for 1976. 



Sec. 203(f) 



70 



ternal Revenue Code of 1954) taken into account under clause 
(i) over the gross income (plus his distributive share of in- 
come so described) taken into account under clause (i). 

(C) For purposes of this subsection, an individual's wages shall 
be computed without regard to the limitations as to amounts of 
remuneration specified in subsections (a), (g)(2), (g)(3), 
(h) (2), and (j) of section 209; and in making such computation 
services which do not constitute employment as defined in section 
210, performed within the United States by the individual as an 
employee or performed outside the United States in the active 
military or naval service of the United States, shall be deemed to 
be employment as so defined if the remuneration for such services 
is not includible in computing his net earnings or net loss from 
sel f -employment . 

(D) In the case of an individual — 

(i) who has attained the age of 65 on or before the last day 
of the taxable year, and 

(ii) who shows to the satisfaction of the Secretary that he 
is receiving royalties attributable to a copyright or patent 
obtained before the taxable year in which he attained the age 
of 65 and that the property to which the copyright or patent 
relates was created by his own personal efforts, 

there shall be excluded from gross income any such royalities. 

(6) For purposes of this subsection, wages (determined as pro- 
vided in paragraph (5) (C) ) which, according to reports received 
by the Secretary, are paid to an individual during a taxable year 
shall be presumed to have been paid to him for services performed 
in such year until it is shown to the satisfication of the Secretary 
that they were paid for services performed in another taxable 
year. If such reports with respect to an individual show his wages 
for a calendar year, such individual's taxable year shall be pre- 
sumed to be a calendar year for purposes of this subsection until 
it is shown to the satisfaction of the Secretary that his taxable 
year is not a calendar year. 

(7) Where an individual's excess earnings are charged to a 
month and the excess earnings so charged are less than the total of 
the payments (without regard to such charging) to which all per- 
sons are entitled under section 202 for such month on the basis 
of his wages and self -employment income, the difference between 
such total and the excess so charged to such month shall be paid 
(if it is otherwise payable under this title) to such individual and 
other persons in the proportion that the benefit to which each of 
them is entitled (without regard to such charging, without the 
application of section 202 (k) (3), and prior to the application of 
section 203 (a) ) bears to the total of the benefits to which all of 
them are entitled. 



71 



Sec. 203(f) 



(8) (A) Whenever the Secretary pursuant to section 215 (i) 
increases benefits effective with the month of June following a 
cost-of-living computation quarter he shall also determine and 
publish in the Federal Register on or before November 1 of the 
calendar year in which such quarter occurs a new exempt amount 
which shall be effective (unless such new exempt amount is pre- 
vented from becoming effective by subparagraph (C) of this para- 
graph) with respect to any individual's taxable year which ends 
after the calendar year in which such benefit increase is effective 
(or, in the case of an individual who dies during the calendar year 
after the calendar year in which the benefit increase is effective, 
with respect to such individual's taxable year which ends, upon 
his death, during such year) .* 

(B) The exempt amount for each month of a particular tax- 
able year shall be whichever of the following is the larger — 

(i) the exempt amount which was in effect with respect to 
months in the taxable year in which the determination under 
subparagraph (A) was made, or 

(ii) the product of the exempt amount described in clause 
(i) and the ratio of (I) the average of the wages of all 
employees as reported to the Secretary of the Treasury for 
the calendar year preceding the calendar year in which the 
determination under subparagraph (A) was made to (II) 
the average of the wages of all employees as reported to the 
Secretary of the Treasury for the calendar year 1973, or, if 
later, the calendar year preceding the most recent calendar 
year in which an increase in the exempt amount was enacted 
or a determination resulting in such an increase was made 
under subparagraph (A), with such product, if not a mul- 
tiple of $10, being rounded to the next higher multiple of $10 
where such product is a multiple of $5 but not of $10 and 
to the nearest multiple of $10 in any other case. For purposes 
of this clause (ii), the average of the wages for the calendar 
year 1978 (or any prior calendar year) shall, in the case of 
determinations made under subparagraph (A) prior to De- 
cember 31, 1979, be deemed to be an amount equal to 400 per 
centum of the amount of the average of the taxable wages 
of all employees as reported to the Secretary for the first 
calendar quarter of such calendar year. 2 

Whenever the Secretary determines that the exempt amount is to be 
increased in any year under this paragraph, he shall notify the House 
Committee on Ways and Means and the Senate Committee on Finance 
within 30 days after the close of the base quarter (as defined in section 



1 $210 for 1975 : $230 for 1976. 

2 Paragraph 8(B) was amendel by section 8(i) of Public Law 94-202. 



Sec. 203(g) 



72 



215 (i) (1) ( A) ) in such year of the estimated amount of such increase, 
indicating the new exempt amount, the actuarial estimates of the 
effect of the increase, and the actuarial assumptions and methodolog}' 
used in preparing such estimates. 

(C) Notwithstanding the determination of a new exempt 
amount by the Secretary under subparagraph (A) (and notwith- 
standing any publication thereof under such subparagraph or any 
notification thereof under the last sentence of subparagraph (B) ) , 
such new exempt amount shall not take effect pursuant thereto if 
during the calendar year in which such determination is made a 
law increasing the exempt amount is enacted. 

Penalty for Failure to Report Certain Events 

(g) Any individual in receipt of benefits subject to deduction under 
subsection (c) (or who is in receipt of such benefits on behalf of an- 
other individual) , because of the occurrence of an event specified there- 
in, who fails to report such occurrence to the Secretary prior to the 
receipt and acceptance of an insurance benefit for the second month 
following the month in which such event occurred, shall suffer de- 
ductions in addition to those imposed under subsection (c) as follows : 

(1) if such failure is the first one with respect to which an 
additional deduction is imposed by this subsection, such addi- 
tional deduction shall be equal to his benefit or benefits for the 
first month of the period for which there is a failure to report even 
though such failure is with respect to more than one month ; 

(2) if such failure is the second one with respect to which an 
additional deduction is imposed by this subsection, such additional 
deduction shall be equal to two times his benefit or benefits for the 
first month of the period for which there is a failure to report even 
though such failure is with respect to more than two months ; and 

(3) if such failure is the third or a subsequent one for which 
an additional deduction is imposed under this subsection, such 
additional deduction shall be equal to three times his benefit or 
benefits for the first month of the period for which there is a 
failure to report even though the failure to report is with respect 
to more than three months ; 

except that the number of additional deductions required by this sub- 
section shall not exceed the number of months in the period for which 
there is a failure to report. As used in this subsection, the term "period 
for which there is a failure to report" with respect to any individual 
means the period for which such individual received and accepted in- 
surance benefits under section 202 without making a timely report and 
for which deductions are required under subsection (c) . 



73 



Sec. 203(h) 



Report of Earnings to Secretary 

(h) (1) (A) If an individual is entitled to any monthly insurance 
benefit under section 202 during any taxable year in which he has 
earnings or wages, as computed pursuant to paragraph (5) of subsec- 
tion (f), in excess of the product of $200 or the exempt amount as 
determined under subsection (f)(8) 1 times the number of months 
in such year, such individual (or the individual who is in receipt of 
such benefit on his behalf) shall make a report to the Secretary of 
his earnings (or wages) for such taxable year. Such report shall 
be made on or before the fifteenth day of the fourth month following 
the close of such year, and shall contain such information and be made 
in such manner as the Secretary may by regulations prescribe. Such 
report need not be made for any taxable year (i) beginning with or 
after the month in which such individual attained the age of 
72, or (ii) if benefit payments for all months (in such taxable year) 
in which such individual is under age 72 have been suspended under 
the provisions of the first sentence of paragraph (3) of this subsection. 
The Secretary may grant a reasonable extension of time for making 
the report of earnings required in this paragraph if he finds that there 
is valid reason for a delay, but in no case may the period be extended 
more than three months. 

(B) If the benefit payments of an individual have been suspended 
for all months in any taxable year under the provisions of the first 
sentence of paragraph (3) of this subsection, no benefit payments shall 
be made to such individual for any such month in such taxable year 
after the expiration of the period of three years, three months, and 
fifteen days following the close of such taxable year unless within 
such period the individual, or some other person entitled to benefits 
under this title on the basis of the same wages and self-employment 
income, files with the Secretary information showing that a benefit 
for such month is payable to such individual. 

(2) If an individual fails to make a report required under para- 
graph ( 1 ) , within the time prescribed by or in accordance with such 
paragraph, for any taxable year and any deduction is imposed under 
subsection (b) by reason of his earnings for such year, he shall suffer 
additional deductions as follows: 

(A) if such failure is the first one with respect to which an 
additional deduction is imposed under this paragraph, such addi- 
tional deduction shall be equal to his benefit or benefits for the 
last month of such year for which he was entitled to a benefit 
under section 202, except that if the deduction imposed under sub- 
section (b) by reason of his earnings for such year is less than 
the amount of his benefit (or benefits) for the last month of 
such year for which he was entitled to a benefit under section 202, 

1 $210 for 1975 ; $230 for 1976. 



64-310 O - 76 - 6 



Sec. 203(h) 



74 



the additional deduction shall be equal to the amount of the deduc- 
tion imposed under subsection (b) but not less than $10; 

(B) if such failure is the second one for which an additional 
deduction is imposed under this paragraph, such additional de- 
duction shall be equal to two times his benefit or benefits for the 
last month of such year for which he was entitled to a benefit 
under section 202; 

(C) if such failure is the third or a subsequent one for which 
an additional deduction is imposed under this paragraph, such 
additional deduction shall be equal to three times his benefit or 
benefits for the last month of such year for which he was entitled 
to a benefit under section 202 ; 

except that the number of the additional deductions required by this 
paragraph with respect to a failure to report earnings for a taxable 
year shall not exceed the number of months in such year for which 
such individual received and accepted insurance benefits under section 
202 and for which deductions are imposed under subsection (b) by 
reason of his earnings. In determining whether a failure to report 
earnings is the first or a subsequent failure for any individual, all 
taxable years ending prior to the imposition of the first additional 
deduction under this paragraph, other than the latest one of such 
years, shall be disregarded. 

(3) If the Secretary determines, on the basis of information ob- 
tained by or submitted to him, that it may reasonably be expected 
that an individual entitled to benefits under section 202 for any tax- 
able year will suffer deductions imposed under subsection (b) by 
reason of his earnings for such year, the Secretary may, before the 
close of such taxable year, suspend the total or less than the total 
payment for each month in such year (or for only such months as the 
Secretary may specify) of the benefits payable on the basis of such 
individual's wages and self-employment income ; and such suspension 
shall remain in effect with respect to the benefits for any month until 
the Secretary has determined whether or not any deduction is imposed 
for such month under subsection (b). The Secretary is authorized, 
before the close of the taxable year of an individual entitled to benefits 
during such year, to request of such individual that he make, at such 
time or times as the Secretary may specify, a declaration of his 
estimated earnings for the taxable year and that he furnish to the 
Secretary such other information with respect to such earnings as the 
Secretary may specify. A failure by such individual to comply with 
any such request shall in itself constitute justification for a deter- 
mination under this paragraph that it may reasonably be expected 
that the individual will suffer deductions imposed under subsection 
(b) by reason of his earnings for such year. If, after the close of a 
taxable year of an individual entitled to benefits under section 202 



75 



Sec. 203(k) 



for such year, the Secretary requests such individual to furnish a 
report of his earnings (as computed pursuant to paragraph (5) of 
subsection (f)) for such taxable year or any other information with 
respect to such earnings which the Secretary may specify, and the 
individual fails to comply with such request, such failure shall in 
itself constitute justification for a determination that such individual's 
benefits are subject to deductions under subsection (b) for each month 
in such taxable year (or only for such months thereof as the Secretary 
may specify) by reason of his earnings for such year. 

Circumstances Under Which Deductions and Reductions not Required 

(i) In the case of any individual, deductions by reason of the provi- 
sions of subsection (b), (c), (g), or (h) of this section, or the provi- 
sions of section 222(b), shall, notwithstanding such provisions, be 
made from the benefit to which such individual is entitled only to the 
extent that such deductions reduce the total amount which would oth- 
erwise be paid, on the basis of the same wages and self -employment 
income, to such individual and the other individuals living in the 
same household. 

Attainment of Age Seventy-two 

(j) For the purposes of this section, an individual shall be con- 
sidered as seventy-two years of age during the entire month in which 
he attains such age. 

Noncovered Remunerative Activity Outside the United States 

(k) An individual shall be considered to be engaged in noncovered 
remunerative activity outside the United States if he performs serv- 
ices outside the United States as an employee and such services do 
not constitute employment as defined in section 210 and are not per- 
formed in the active military or naval service of the United States, or 
if he carries on a trade or business outside the United States (other 
than the performance of service as an employee) the net income or 
loss of which (1) is not includible in computing his net earnings from 
self -employment for a taxable year and (2) would not be excluded 
from net earnings from self -employment, if carried on in the United 
States, by any of the numbered paragraphs of section 211(a). When 
used in the preceding sentence with respect to a trade or business 
(other than the performance of service as an employee), the term 
"United States" does not include the Commonwealth of Puerto Rico, 
the Virgin Islands, Guam, or American Samoa in the case of an alien 
who is not a resident of the United States (including the Common- 
wealth of Puerto Rico, the Virgin Islands, Guam, and American Sa- 
moa) and the term "trade or business" shall have the same meaning 
as when used in Section 162 of the Internal Revenue Code of 1954. 



Sec. 203(1) 



76 



Good Cause for Failure To Make Reports Required 

(1) The failure of an individual to make any report required by sub- 
section (g) or (h) (1) (A) within the time prescribed therein shall not 
be regarded as such a failure if it is shown to the satisfaction of the 
Secretary that he had good cause for failing to make such report 
within such time. The determination of what constitutes good cause 
for purposes of this subsection shall be made in accordance with regu- 
lations of the Secretary. 

Overpayments and Underpayments 

Sec. 204. (a) Whenever the Secretary finds that more or less than 
the correct amount of payment has been made to any person under 
this title, proper adjustment or recovery shall be made, under regu- 
lations prescribed by the Secretary, as follows : 

(1) With respect to payment to a person of more than the correct 
amount, the Secretary shall decrease any payment under this title 
to which such overpaid person is entitled, or shall require such over- 
paid person or his estate to refund the amount in excess of the correct 
amount, or shall decrease any payment under this title payable to his 
estate or to any other person on the basis of the wages and self -employ- 
ment income which were the basis of the payments to such overpaid 
person, or shall apply any combination of the foregoing. A payment 
made under this title on the basis of an erroneous report of death by 
the Department of Defense of an individual in the line of duty while 
he is a member of the uniformed services (as defined in section 210 
(m)) on active duty (as defined in section 210(1)) shall not be con- 
sidered an incorrect payment for any month prior to the month such 
Department notifies the Secretary that such individual is alive. 

(2) With respect to payment to a person less than the correct 
amount, the Secretary shall make payment of the balance of the 
amount due such underpaid person, or, if such person dies before 
payments are completed or before negotiating one or more checks 
representing correct payments, disposition of the amount due shall be 
made in accordance with subsection (d). 

(b) In any case in which more than the correct amount of payment 
has been made, there shall be no adjustment of payments to, or recov- 
ery by the United States from, any person who is without fault if 
such adjustment or recovery would defeat the purpose of this title or 
would be against equity and good conscience. 

(c) No certifying or disbursing officer shall be held liable for any 
amount certified or paid by him to any person where the adjustment 
or recovery of such amount is waived under subsection (b), or where 
adjustment under subsection (a) is not completed prior to the death | 
of all persons against whose benefits deductions are authorized. 



77 



Sec. 204(d) 



(d) If an individual dies before any payment due him under this 
title is completed, payment of the amount due (including the amount 
of any unnegotiated checks) shall be made — 

(1) to the person, if any, who is determined by the Secretary 
to be the surviving spouse of the deceased individual and who 
either (i) was living in the same household with the deceased at 
the time of his death or (ii) was, for the month in which the 
deceased individual died, entitled to a monthly benefit on the basis 
of the same wages and self -employment income as was the de- 
ceased individual; 

(2) if there is no person who meets the requirements of para- 
graph (1), or if the person who meets such requirements dies 
before the payment due him under this title is completed, to the 
child or children, if any, of the deceased individual who were, for 
the month in which the deceased individual died, entitled to 
monthly benefits on the basis of the same wages and self-employ- 
ment income as was the deceased individual (and, in case there 
is more than one such child, in equal parts to each such child) ; 

(3) if there is no person who meets the requirements of para- 
graph (1) or (2), or if each person who meets such requirements 
dies before the payment due him under this title is completed, 
to the parent or parents, if any, of the deceased individual who 
were, for the month in which the deceased individual died, en- 
titled to monthly benefits on the basis of the same wages and self- 
employment income as was the deceased individual (and, in case 
there is more than one such parent, in equal parts to each such 
parent) ; 

(4) if there is no person who meets the requirements of para- 
graph (1), (2), or (3), or if each person who meets such require- 
ments dies before the payment due him under this title is com- 
pleted, to the person, if any, determined by the Secretary to be 
the surviving spouse of the deceased individual ; 

(5) if there is no person who meets the requirements of para- 
graph (1), (2), (3), or (4), or if each person who meets such 
requirements dies before the payment due him under this title is 
completed, to the person or persons, if any, determined by the 
Secretary to be the child or children of the deceased individual 
(and, in case there is more than one such child, in equal parts to 
each such child) ; 

(6) if there is no person who meets the requirements of para- 
graph (1) , (2) , (3) , (4) , or (5) , or if each person who meets such 
requirements dies before the payment due him under this title 
is completed, to the parent or parents, if any, of the deceased in- 
dividual (and, in case there is more than one such parent, in equal 
parts to each such parent) ; or 



Sec. 205(a) 



78 



(7) if there is no person who meets the requirements of para- 
graph (1), (2), (3), (4), (5), or (6), or if each person who meets 
such requirements dies before the payment due him under this 
title is completed, to the legal representative of the estate of the 
deceased individual, if any. 

Evidence, Procedure, and Certification for Payment 

Sec. 205. (a) The Secretary shall have full power and authority to 
make rules and regulations and to establish procedures, not inconsist- 
ent with the provisions of this title, which are necessary or appropri- 
ate to carry out such provisions, and shall adopt reasonable and 
proper rules and regulations to regulate and provide for the nature 
and extent of the proofs and evidence and the method of taking and 
furnishing the same in order to establish the right to benefits here- 
under. 

(b) The Secretary is directed to make findings of fact, and decisions 
as to the rights of any individual applying for a payment under this 
title. Upon request by any such individual or upon request by a wife, 
divorced wife, widow, surviving divorced wife, surviving divorced 
mother, husband, widower, child, or parent who makes a showing in 
writing that his or her rights may be prejudiced by any decision the 
Secretary has rendered, he shall give such applicant and such other 
individual reasonable notice and opportunity for a hearing with re- 
spect to such decision, and, if a hearing is held, shall, on the basis of 
evidence adduced at the hearing, affirm, modify, or reverse his findings 
of fact and such decision. Any such request with respect to such a de- 
cision must be filed within sixty days after notice of such decision 
is received by the individual making such request. The Secretary 
is further authorized, on his own motion, to hold such hearings and to 
conduct such investigations and other proceedings as he may deem 
necessary or proper for the administration of this title. In the course 
of any hearing, investigation, or other proceeding, he may administer 
oaths and affirmations, examine witnesses, and receive evidence. Evi- 
dence may be received at any hearing before the Secretary even 
though inadmissible under rules of evidence applicable to court 
procedure. 1 

(c) (1) For the purposes of this subsection — 

(A) The term "year" means a calendar year when used with 
respect to wages and a taxable year (as defined in section 211(e) ) 
when used with respect to self -employment income. 

(B) The term "time limitation" means a period of three years, 
three months, and fifteen days. 



1 The third sentence of section 205(b) was amended by section 4 of Public Law 94-202 
effective March 1, 1076. Prior to that date, the appeal period is six months. 



79 



Sec. 205(c) 



(C) The term "survivor'' means an individual's spouse, sur- 
viving divorced wife, surviving divorced mother, child, or parent, 
who survives such individual. 
(2) (A) On the basis of information obtained by or submitted to the 
Secretary, and after such verification thereof as he deems necessary, 
the Secretary shall establish and maintain records of the amounts of 
wages paid to, and the amounts of self -employment income derived 
by, each individual and of the periods in which such wages were paid 
and such income was derived and, upon request, shall inform any in- 
dividual or his survivor, or the legal representative of such individual 
or his estate, of the amounts of wages and self -employment income of 
such individual and the periods during which such wages were paid 
and such income was derived, as shown by such records at the time of 
such request. 

(B) (i) In carrying out his duties under subparagraph (A), the 
Secretary shall take affirmative measures to assure that social security 
account numbers will, to the maximum extent practicable, be assigned 
to all members of appropriate groups or categories of individuals by 
assigning such numbers (or ascertaining that such numbers have al- 
ready been assigned) : 

(I) to aliens at the time of their lawful admission to the United 
States either for permanent residence or under other authority 
of law permitting them to engage in employment in the United 
States and to other aliens at such time as their status is so changed 
as to make it lawful for them to engage in such employment ; 

(II) to any individual who is an applicant for or recipient of 
benefits under any program financed in whole or in part from 
Federal funds including any child on whose behalf such benefits 
are claimed by another person ; and 

(III) to any other individual when it appears that he could 
have been but was not assigned an account number under the pro- 
visions of subclauses (I) or (II) but only after such investiga- 
tion as is necessary to establish to the satisfaction of the Secretary, 
the identity of such individual, the fact that an account number 
has not already been assigned to such individual, and the fact that 
such individual is a citizen or a noncitizen who is not, because of 
his alien status, prohibited from engaging in employment; 

and, in carrying out such duties, the Secretary is authorized to take 
affirmative measures to assure the issuance of social security numbers : 

(IV) to or on behalf of children who are below school age at 
the request of their parents or guardians ; and 

(V) to children of school age at the time of their first enroll- 
ment in school. 

(ii) The Secretary shall require of applicants for social security 
account numbers such evidence as may be necessary to establish the age, 



Sec. 205(c) 



80 



citizenship, or alien status, and true identity of such applicants, and to 
determine which (if any) social security account number has previ- 
ously been assigned to such individual. 

(iii) In carrying out the requirements of this subparagraph, the Sec- 
retary shall enter into such agreements as may be necessary with the 
Attorney General and other officials and with State and local wel- 
fare agencies and school authorities (including non-public school 
authorities) . 

(3) The Secretary's record shall be evidence for the purpose of pro- 
ceedings before the Secretary or any court of the amounts of wages 
paid to, and self-employment income derived by, an individual and of 
the periods in which such wages were paid and such income was de- 
rived. The absence of an entry in such records as to wages alleged to 
have been paid to, or as to self -employment income alleged to have 
been derived by, an individual in any period shall be evidence that 
no such alleged wages were paid to, or that no such alleged income was 
derived by, such individual during such period. 

(4) Prior to the expiration of the time limitation following any 
year the Secretary may, if it is brought to his attention that any entry 
of wages or self-employment income in his records for such year is 
erroneous or that any item of wages or self -employment income for 
such year has been omitted from such records, correct such entry or 
include such omitted item in his records, as the case may be. After the 
expiration of the time limitation following any year — 

(A) the Secretary's records (with changes, if any, made pur- 
suant to paragraph (5)) of the amounts of wages paid to, and 
self-employment income derived by, an individual during any 
period in such year shall be conclusive for the purposes of this 
title ; 

(B) the absence of an entry in the Secretary's records as to the 
wages alleged to have been paid by an employer to an individual 
during any period in such year shall be presumptive evidence for 
the purposes of this title that no such alleged wages were paid to 
such individual in such period ; and 

(C) the absence of an entry in the Secretary's records as to the 
self -employment income alleged to have been derived by an indi- 
vidual in such year shall be conclusive for the purposes of this 
title that no such alleged self-employment income was derived 
by such individual in such year unless it is shown that he filed a 
tax return of his self-employment income for such year before 
the expiration of the time limitation following such year, in which 
case the Secretary shall include in his records the self-employ- 
ment income of such individual for such year. 

(5) After the expiration of the time limitation following any year 
in which wages were paid or alleged to have been paid to, or self- 



81 



Sec. 205(c) 



employment income was derived or alleged to have been derived by, an 
individual, the Secretary may change or delete any entry with respect 
to wages or self -employment income in his records of such year for 
such individual or include in his records of such year for such indi- 
vidual any omitted item of wages or self-employment income but 
only— ' H ' " ' 

(A) if an application for monthly benefits or for a lump-sum 
death payment was filed within the time limitation following 
such year ; except that no such change, deletion, or inclusion may 
be made pursuant to this subparagraph after a final decision upon 
the application for monthly benefits or lump-sum death payment ; 

(B) if within the time limitation following such year an in- 
dividual or his survivor makes a request for a change or deletion, 
or for an inclusion of an omitted item, and alleges in writing that 
the Secretary's records of the wages paid to, or the self-employ- 
ment income derived by, such individual in such year are in one or 
more respects erroneous ; except that no such change, deletion, or 
inclusion may be made pursuant to this subparagraph after a final 
decision upon such request. Written notice of the Secretary's de- 
cision on any such request shall be given to the individual who 
made the request ; 

(C) to correct errors apparent on the face of such records; 

(D) to transfer items to records of the Railroad Retirement 
Board if such items were credited under this title when they 
should have been credited under the Railroad Retirement Act, or 
to enter items transferred by the Railroad Retirement Board 
which have been credited under the Railroad Retirement Act when 
they should have been credited under this title; 

(E) to delete or reduce the amount of any entry which is er- 
roneous as a result of fraud ; 

(F) to conform his records to — 

(i) tax returns or portions thereof (including information 
returns and other written statements) filed with the Commis- 
sioner of Internal Revenue under title VIII of the Social 
Security Act, under subchapter E of chapter 1 or subchapter 
A of chapter 9 of the Internal Revenue Code of 1939, under 
chapter 2 or 21 of the Internal Revenue Code of 1954, or 
under regulations made under authority of such title, sub- 
chapter, or chapter ; 

(ii) wage reports filed by a State pursuant to an agree- 
ment under section 218 or regulations of the Secretary, there- 
under; or 

(iii) assessments of amounts due under an agreement pur- 
suant to section 218, if such assessments are made within the 
oeriod specified in subsection (q) of such section, or allow- 



Sec. 205(c) 



82 



ances of credits or refunds of overpayments by a State under 

an agreement pursuant to such section; 
except that no amount of self -employment income of an individ- 
ual for any taxable year (if such return or statement was filed 
after the expiration of the time limitation following the taxable 
year) shall be included in the Secretary's records pursuant to this 
subparagraph ; 

(G) to correct errors made in the allocation, to individuals or 
periods, of wages or self-employment income entered in the rec- 
ords of the Secretary ; 

(H) to include wages paid during any period in such year to 
an individual by an employer if there is an absence of an entry 
m the Secretary's records of wages having been paid by such 
employer to such individual in such period; 

(I) to enter items which constitute remuneration for employ- 
ment under subsection (o), such entries to be in accordance with 
certified reports of records made by the Railroad Retirement 
Board pursuant to section 5(k)(3) of the Railroad Retirement 
Act of 1937 ; or 

(J) to include self -employment income for any taxable year, 
up to, but not in excess of, the amount of wages deleted by the 
Secretary as payments erroneously included in such records as 
wages paid to such individual, if such income (or net earnings 
from self -employment) , not already included in such records as 
self -employment income, is included in a return or statement (re- 
ferred to in subparagraph (F) ) filed before the expiration of the 
time limitation following the taxable year in which such deletion 
of wages is made. 

(6) Written notice of any deletion or reduction under paragraph 
(4) or (5) shall be given to the individual whose record is involved or 
to his survivor, except that (A) in the case of a deletion or reduction 
with respect to any entry of wages such notice shall be given to such 
individual only if he has previously been notified by the Secretary of 
the amount of his wages for the period involved, and (B) such notice 
shall be given to such survivor only if he or the individual whose 
record is involved has previously been notified by the Secretary of the 
amount of such individual's wages and self-employment income for 
the period involved. 

(7) Upon request in writing (within such period, after any change 
or refusal of a request for a change of his records pursuant to this 
subsection, as the Secretary may prescribe), opportunity for hearing 
with respect to such change or refusal shall be afforded to any individ- 
ual named therein, or by registered mail or by certified mail the 
Secretary shall make findings of fact and a decision based upon the 
evidence adduced at such hearing and shall include any omitted items, 



83 



Sec. 205(g) 



or change or delete any entry, in his records as may be required by such 
findings and decision. 

(8) Decisions of the Secretary under this subsection shall be review- 
able by commencing a civil action in the United States district court 
as provided in subsection (g). 

(d) For the purpose of any hearing, investigation, or other pro- 
ceeding authorized or directed under this title, or relative to any 
other matter within his jurisdiction hereunder, the Secretary shall 
have power to issue subpenas requiring the attendance and testimony 
of witnesses and the production of any evidence that relates to any 
matter under investigation or in question before the Secretary. Such 
attendance of witnesses and production of evidence at the designated 
place of such hearing, investigation, or other proceeding may be re- 
quired from any place in the United States or in any Territory or 
possession thereof. Subpenas of the Secretary shall be served by any- 
one authorized by him ( 1 ) by delivering a copy thereof to the individ- 
ual named therein, or (2) by registered mail or by certified mail ad- 
dressed to such individual at his last dwelling place or principal place 
of business. A verified return by the individual so serving the subpena 
setting forth the manner of service, or, in the case of service by reg- 
istered mail or by certified mail, the return post-office receipt therefor 
signed by the individual so served, shall be proof of service. Witnesses 
so subpenaed shall be paid the same fees and mileage as are paid wit- 
nesses in the district courts of the United States. 

(e) In case of contumacy by, or refusal to obey a subpena duly 
served upon, any person, any district court of the United States for the 
judicial district in which said person charged with contumacy or re- 
fusal to obey is found or resides or transacts business, upon application 
by the Secretary, shall have jurisdiction to issue an order requiring 
such person to appear and give testimony, or to appear and produce 
evidence, or both ; any failure to obey such order of the court may be 
punished by said court as contempt thereof. 

(f) [Repealed.] 

(g) Any individual, after any final decision of the Secretary made 
after a hearing to which he was a party, irrespective of the amount 
in controversy, may obtain a review of such decision by a civil action 
commenced within sixty days after the mailing to him of notice of 
such decision or within such further time as the Secretary may allow. 
Such action shall be brought in the district court of the United States 
for the judicial district in which the plaintiff resides, or has his princi- 
pal place of business, or, if he does not reside or have his principal 
place of business within any such judicial district, in the District Court 
of the United States for the District of Columbia. As part of his an- 
swer the Secretary shall file a certified copy of the transcript of the 
record including the evidence upon which the findings and decision 



Sec. 205(h) 



84 



complained of are based. The court shall have power to enter, upon 
the pleadings and transcript of the record, a judgment affirming, modi- 
fying, or reversing the decision of the Secretary, with or without 
remanding the case for a rehearing. The findings of the Secretary as 
to any fact, if supported by substantial evidence, shall be conclusive, 
and where a claim has been denied by the Secretary or a decision is 
rendered under subsection (b) hereof which is adverse to an individual 
who was a party to the hearing before the Secretary, because of failure 
of the claimant or such individual to submit proof in conformity with 
any regulation prescribed under subsection (a) hereof, the court shall 
review only the question of conformity with such regulations and the 
validity of such regulations. The court shall, on motion of the Secre- 
tary made before he files his answer, remand the case to the Secretary 
for further action by the Secretary, and may, at any time, on good 
cause shown, order additional evidence to be taken before the Secre- 
tary, and the Secretary shall, after the case is remanded, and after 
hearing such additional evidence if so ordered, modify or affirm his 
findings of fact or his decision, or both, and shall file with the court 
any such additional and modified findings of fact and decision, and 
a transcript of the additional record and testimony upon which his ac- 
tion in modifying or affirming was based. Such additional or modified 
findings of fact and decision shall be reviewable only to the extent 
provided for review of the original findings of fact and decision. The 
judgment of the court shall be final except that it shall be subject to 
review in the same manner as a judgment in other civil actions. Any 
action instituted in accordance with this subsection shall survive not- 
withstanding any change in the person occupying the office of Secre- 
tary or any vacancy in such office. 

(h) The findings and decision of the Secretary after a hearing shall 
be binding upon all individuals who were parties to such hearing. No 
findings of fact or decision of the Secretary shall be reviewed by any 
person, tribunal, or governmental agency except as herein provided. 
No action against the United States, the Secretary, or any officer or 
employee thereof shall be brought under Section 24 of the Judicial 
Code of the United States to recover on any claim arising under this 
title. 

(i) Upon final decision of the Secretary, or upon final judgment of 
any court of competent jurisdiction, that any person is entitled to any 
payment or payments under this title, the Secretary shall certify to 
the Managing Trustee the name and address of the person so entitled 
to receive such payment or payments, the amount of such payment or 
payments, and the time at which such payment or payments should 
be made, and the Managing Trustee, through the Fiscal Service of the 
Treasury Department, and prior to any action thereon by the General 
Accounting Office, shall make payment in accordance with the certifi- 



85 



Sec. 205(n) 



cation of the Secretary (except that in the case of (A) an individual 
who will have completed ten years of service creditable under the Rail- 
road Retirement Act of 1937 or the Railroad Retirement Act of 1974, 
(B) the wife or husband of such an individual, (C) any survivor of 
such an individual if such survivor is entitled, or could upon applica- 
tion become entitled, to an annunity under section 2 of the Railroad 
Retirement Act of 1974, and (D) any other person entitled to benefits 
under section 202 of this Act on the basis of the wages and self -employ- 
ment income of such an individual (except a survivor of such an indi- 
vidual where such individual did not have a current connection with 
the railroad industry, as defined in the Railroad Retirement Act of 
1974, at the time of his death), such certification shall be made to the 
Railroad Retirement Board which shall provide for such payment or 
payments to such person on behalf of the Managing Trustee in accord- 
ance with the provisions of the Railroad Retirement Act of 1974) : 
Provided, That where a review of the Secretary's decision is or may 
be sought under subsection (g) the Secretary may withhold certifica- 
tion of payment pending such review. The Managing Trustee shall 
not be held personally liable for any payment or payments made in 
accordance with a certification by the Secretary. 

(j) When it appears to the Secretary that the interest of an appli- 
cant entitled to a payment would be served thereby, certification of 
payment may be made, regardless of the legal competency or incompe- 
tency of the individual entitled thereto, either for direct payment to 
such applicant, or for his use and benefit to a relative or some other 
person. 

(k) Any payment made after December 31, 1939, under conditions 
set forth in subsection (j), any payment made before January 1, 1940, 
to, or on behalf of, a legally incompetent individual, and any payment 
made after December 31, 1939, to a legally incompetent individual 
without knowledge by the Secretary of incompetency prior to certifi- 
cation of payment, if otherwise valid under this title, shall be a com- 
plete settlement and satisfaction of any claim, right, or interest in and 
to such payment. 

(1) The Secretary is authorized to delegate to any member, officer, 
or employee of the Department of Health, Education, and Welfare 
designated by him any of the powers conferred upon him by this sec- 
tion, and is authorized to be represented by his own attorneys in any 
court in any case or proceeding arising under the provisions of sub- 
section (e). 

(m) [Repealed.] 

(n) The Secretary may, in his discretion, certify to the Managing 
Trustee any two or more individuals of the same family for joint pay- 
ment of the total benefits payable to such individuals for any month, 
and if one of such individuals dies before a check representing such 

i 



Sec. 205(o) 



86 



joint payment is negotiated, payment of the amount of such unnegoti- 
ated check to the surviving individual or individuals may be author- 
ized in accordance with regulations of the Secretary of the Treasury ; 
except that appropriate adjustment or recovery shall be made under 
section 204(a) with respect to so much of the amount of such check as 
exceeds the amount to which such surviving individual or individuals 
are entitled under this title for such month. 

Crediting of Compensation Under the Railroad Retirement Act 

(o) If there is no person who would be entitled, upon application 
therefor, to an annuity under section 2 of the Railroad Retirement Act 
of 1974, or to a lump-sum payment under section 6(b) of such Act 
with respect to the death of an employee (as defined in such Act), 
then, notwithstanding section 210(a)(9) of this Act, compensation 
(as defined in such Railroad Retirement Act, but excluding com- 
pensation attributable as having been paid during any month on 
account of military service creditable under section 3(i) of such Act 
if wages are deemed to have been paid to such employee during such 
month under subsection (a) or (e) of section 217 of this Act) of such 
employee shall constitute remuneration for employment for purposes 
of determining (A) entitlement to and the amount of any lump-sum 
death payment under this title on the basis of such employee's wages 
and self -employment income and (B) entitlement to and the amount 
of any monthly benefit under this title, for the month in which such 
employee died or for any month thereafter, on the basis of such wages 
and self -employment income. For such purposes, compensation (as so 
defined) paid in a calendar year shall, in the absence of evidence to the 
contrary, be presumed to have been paid in equal proportions with 
respect to all months in the year in which the employee rendered serv- 
ices for such compensation. 

Special Rules in Case of Federal Service 

(p) (1) With respect to service included as employment under sec- 
tion 210 which is performed in the employ of the United States or in 
the employ of any instrumentality which is wholly owned by the 
United States, including service, performed as a member of a uni- 
formed service, to which the provisions of subsection (1) (1) of such 
section are applicable, and including service, performed as a volunteer 
or volunteer leader within the meaning of the Peace Corps Act, to 
which the provisions of section 210 (o) are applicable, the Secretary 
shall not make determinations as to whether an individual has per- 
formed such service, the periods of such service, the amounts of re- 
muneration for such service which constitute wages under the provi- 
sions of section 209, or the periods in which or for which such wages 



87 



Sec. 205 (q) 



were paid, but shall accept the determinations with respect thereto of 
the head of the appropriate Federal agency or instrumentality, and 
of such agents as such head may designate, as evidenced by returns 
filed in accordance with the provisions of section 3122 of the Internal 
Revenue Code of 1954 and certifications made pursuant to this sub- 
section. Such determinations shall be final and conclusive. 

(2) The head of any such agency or instrumentality is authorized 
and directed, upon written request of the Secretary, to make certifica- 
tion to him with respect to any matter determinable for the Secretary 
by such head or his agents under this subsection, which the Secretary 
finds necessary in administering this title. 

(3) The provisions of paragraphs (1) and (2) shall be applicable in 
the case of service performed by a civilian employee, not compensated 
from funds appropriated by the Congress, in the Army and Air Force 
Exchange Service, Army and Air Force Motion Picture Service, Navy 
Exchanges, Marine Corps Exchanges, or other activities, conducted by 
an instrumentality of the United States subject to the jurisdiction of 
the Secretary of Defense, at installations of the Department of Defense 
for the comfort, pleasure, contentment, and mental and physical im- 
provement of personnel of such Department; and for purposes of 
paragraphs (1) and (2) the Secretary of Defense shall be deemed to 
be the head of such instrumentality. The provisions of paragraphs 
(1) and (2) shall be applicable also in the case of service performed 
by a civilian employee, not compensated from funds appropriated by 
the Congress, in the Coast Guard Exchanges or other activities, con- 
ducted by an instrumentality of the United States subject to the juris- 
diction of the Secretary of the Treasury, at installations of the Coast 
Guard for the comfort, pleasure, contentment, and mental and physical 
improvement of personnel of the Coast Guard; and for purposes of 
paragraphs (1) and (2) the Secretary of the Treasury shall be deemed 
to be the head of such instrumentality. 

Expedited Benefit Payments 

(q) (1) The Secretary shall establish and put into effect procedures 
under which expedited payment of monthly insurance benefits under 
this title will, subject to paragraph (4) of this subsection, be made as 
set forth in paragraphs (2) and (3) of this subsection. 

(2) In any case in which — 

(A) an individual makes an allegation that a monthly benefit 
under this title was due him in a particular month but was not 
paid to him, and 

(B) such individual submits a written request for the payment 
of such benefit — 

(i) in the case of an individual who received a regular 
monthly benefit in the month preceding the month with re- 



Sec. 206(a) 



88 



spect to which such allegation is made, not less than 30 days 
after the 15th day of the month with respect to which such 
allegation is made ( and in the event that such request is sub- 
mitted prior to the expiration of such 30-day period, it shall 
be deemed to have been submitted upon the expiration of 
such period), and 

(ii) in any other case, not less than 90 days after the later 
of (I) the date on which such benefit is alleged to have been 
due, or (II) the date on which such individual furnished the 
last information requested by the Secretary (and such written 
request will be deemed to be filed on the day on which it was 
filed, or the ninetieth day after the first day on which the 
Secretary has evidence that such allegation is true, which- 
ever is later), 

the Secretary shall, if he finds that benefits are due, certify such 
benefits for payment, and payment shall be made within 15 days 
immediately following the date on which the written request is 
deemed to have been filed. 

(3) In any case in which the Secretary determines that there is 
evidence, although additional evidence might be required for a final 
decision, that an allegation described in paragraph (2) (A) is true, he 
may make a preliminary certification of such benefit for payment even 
though the 30-day or 90-day periods described in paragraph (2) (B) 
(i) and (B) (ii) have not elapsed. 

(4) Any payment made pursuant to a certification under paragraph 
(3) of this subsection shall not be considered an incorrect payment for 
purposes of determining the liability of the certifying or disbursing 
officer. 

(5) For purposes of this subsection, benefits payable under section 
228 shall be treated as monthly insurance benefits payable under this 
title. However, this subsection shall not apply with respect to any 
benefit for which a check has been negotiated, or with respect to any 
benefit alleged to be due under either section 223, or section 202 to a 
wife, husband, or child of an individual entitled to or applying for 
benefits under section 223, or to a child who has attained age 18 and 
is under a disability, or to a widow or widower on the basis of being 
under a disability. 

Representation of Claimants 

Sec. 206. (a) The Secretary may prescribe rules and regulations 
governing the recognition of agents or other persons, other than at- 
torneys as hereinafter provided, representing claimants before the 
Secretary, and may require of such agents or other persons, before, 
being recognized as representatives of claimants that they shall show" 



89 



Sec. 206(b) 



that they are of good character and in good repute, possessed of the 
necessary qualifications to enable them to render such claimants valu- 
able service, and otherwise competent to advise and assist such claim- 
ants in the presentation of their cases. An attorney in good standing 
who is admitted to practice before the highest court of the State, Terri- 
tory, District, or insular possession of his residence or before the Su- 
preme Court of the United States or the inferior Federal courts, shall 
be entitled to represent claimants before the Secretary. The Secretary 
may, after due notice and opportunity for hearing, suspend or pro- 
hibit from further practice before him any such person, agent, or 
attorney who refuses to comply with the Secretary's rules and regula- 
tions or who violates any provision of this section for which a penalty 
is prescribed. The Secretary may, by rule and regulation, prescribe 
the maximum fees which may be charged for services performed in 
connection with any claim before the Secretary under this title, and 
any agreement in violation of such rules and regulations shall be 
void. Whenever the Secretary, in any claim before him for benefits 
under this title, makes a determination favorable to the claimant, he 
shall, if the claimant was represented by an attorney in connection 
with such claim fix (in accordance with the regulations prescribed 
pursuant to the preceding sentence) a reasonable fee to compensate 
such attorney for the services performed by him in connection with 
such claim. If, as a result of such determination, such claimant is en- 
titled to past-due benefits under this title, the Secretary shall, notwith- 
standing section 205 (i), certify for payment (out of such past-due 
benefits) to such attorney an amount equal to whichever of the follow- 
ing is the smaller : (A) 25 per centum of the total amount of such past- 
due benefits, (B) the amount of the attorney's fee so fixed, or (C) the 
amount agreed upon between the claimant and such attorney as the fee 
for such attorney's services. Any person who shall, with intent to de- 
fraud, in any manner willfully and knowingly deceive, mislead, or 
threaten any claimant or prospective claimant or beneficiary under 
this title by word, circular, letter, or advertisement, or who shall 
knowingly charge or collect directly or indirectly any fee in excess of 
the maximum fee, or make any agreement directly or indirectly to 
charge or collect any fee in excess of the maximum fee, prescribed by 
the Secretary shall be deemed guilty of a misdemeanor and, upon con- 
viction thereof, shall for each offense be punished by a fine not exceed- 
ing $500 or by imprisonment not exceeding one year, or both. 

(b) (1) Whenever a court renders a judgment favorable to a claim- 
ant under this title who was represented before the court by an at- 
torney, the court may determine and allow as part of its judgment a 
reasonable fee for such representation, not in excess of 25 percent of 
the total of the past-due benefits to which the claimant is entitled by 



64-310 O - 76 - 7 



Sec. 207 



90 



reason of such judgment, and the Secretary may, notwithstanding the 
provisions of section 205 (i), certify the amount of such fee for pay- 
ment to such attorney out of, and not in addition to, the amount of 
such past-due benefits. In case of any such judgment, no other fee may 
be payable or certified for payment for such representation except as 
provided in this paragraph. 

(2) Any attorney who charges, demands, receives, or collects for 
services rendered in connection with proceedings before a court to 
which paragraph (1) is applicable any amount in excess of that al- 
lowed by the court thereunder shall be guilty of a misdemeanor and 
upon conviction thereof shall be subject to a fine of not more than 
$500, or imprisonment for not more than one year, or both. 

Assignment 

Sec. 207. The right of any person to any future payment under this 
title shall not be transferable or assignable, at law or in equity, and 
none of the moneys paid or payable or rights existing under this title 
shall be subject to execution, levy, attachment, garnishment, or other 
legal process, or to the operation of any bankruptcy or insolvency law. 

Penalties 

Sec. 208. Whoever— 

(a) for the purpose of causing an increase in any payment author- 
ized to be made under this title, or for the purpose of causing any 
payment to be made where no payment is authorized under this title, 
shall make or cause to be made any false statement or representation 
(including any false statement or representation in connection with 
any matter arising under subchapter E of chapter 1, or subchapter A 
or E of chapter 9 of the Internal Revenue Code of 1939, or chapter 2 
or 21 or subtitle F of the Internal Revenue Code of 1954) as to — 

(1) whether wages were paid or received for employment (as 
said terms are defined in this title and the Internal Revenue 
Code), or the amount of wages or the period during which paid 
or the person to whom paid ; or 

(2) whether net earnings from self -employment (as such term 
is defined in this title and in the Internal Revenue Code) were 
derived, or as to the amount of such net earnings or the period 
during which or the person by whom derived ; or 

(3) whether a person entitled to benefits under this title had 
earnings in or for a particular period (as determined under sec- 
tion 203(f) of this title for purposes of deductions from benefits) , 
or as to the amount thereof ; or 



91 



Sec. 208(g) 



(b) makes or causes to be made any false statement or representa- 
tion of a material fact in any application for any payment or for a 
disability determination under this title ; or 

(c) at any time makes or causes to be made any false statement or 
representation of a material fact for use in determining rights to pay- 
ment under this title ; or 

(d) having knowledge of the occurrence of any event affecting (1) 
his initial or continued right to any payment under this title, or (2) 
the initial or continued right to any payment of any other individual 
in whose behalf he has applied for or is receiving such payment, con- 
ceals or fails to disclose such event with an intent fraudulently to 
secure payment either in a greater amount than is due or when no 
payment is authorized ; or 

(e) having made application to receive payment under this title for 
the use and benefit of another and having received such a payment, 
knowingly and willfully converts such a payment, or any part there- 
of, to a use other than for the use and benefit of such other person, 
shall be guilty of a misdemeanor and upon conviction thereof shall 
be fined not more than $1,000 or imprisoned for not more than one 
year, or both, or 

(f ) willfully, knowingly, and with intent to deceive the Secretary 
as to his true identity (or the true identity of any other person) fur- 
nishes or causes to be furnished false information to the Secretary 
with respect to any information required by the Secretary in connec- 
tion with the establishment and maintenance of the records provided 
for in section 205 (c) (2) ; or 

(g) for the purpose of causing an increase in any payment author- 
ized under this title (or any other program financed in whole or in 
part from Federal funds), or for the purpose of causing a payment 
under this title (or any such other program) to be made when no pay- 
ment is authorized thereunder, or for the purpose of obtaining (for 
himself or any other person) any payment or any other benefit to 
which he (or such other person) is not entitled — 

(1) willfully, knowingly, and with intent to deceive, uses a 
social security account number, assigned by the Secretary (in the 
exercise of his authority under section 205(c) (2) to establish and 
maintain records) on the basis of false information furnished to 
the Secretary by him or by any other person ; or 

(2) with intent to deceive, falsely represents a number to be 
the social security account number assigned by the Secretary to 
him or to another person, when in fact such number is not the 
social security account number assigned by the Secretary to him 
or to such other person ; 



Sec. 209 



92 



shall be guilty of a misdemeanor and upon conviction thereof shall be 
fined not more than $1,000 or imprisoned for not more than one year, 
or both. 

Definition of Wages 

Sec. 209. For the purposes of this title, the term "wages" means 
remuneration paid prior to 1951 which was wages for the purposes 
of this title under the law applicable to the payment of such remunera- 
tion, and remuneration paid after 1950 for employment, including 
the cash value of all remuneration paid in any medium other than 
cash; except that, in the case of remuneration paid after 1950, such 
term shall not include — 

(a)(1) That part of remuneration which, after remuneration (other 
than remuneration referred to in the succeeding subsections of this 
section) equal to $3,600 with respect to employment has been paid 
to an individual during any calendar year prior to 1955, is paid 
to such individual during such calendar year ; 

(2) That part of remuneration which, after remuneration (other 
than remuneration referred to in the succeeding subsections of this 
section) equal to $4,200 with respect to employment has been paid 
to an individual during any calendar year after 1954 and prior to 
1959, is paid to such individual during such calendar year; 

(3) That part of remuneration which, after remuneration (other 
than remuneration referred to in the succeeding subsection of this 
section) equal to $4,800 with respect to employment has been paid to 
an individual during any calendar year after 1958 and prior to 1966, 
is paid to such individual during such calendar year; 

(4) That part of remuneration which, after remuneration (other 
than remuneration referred to in the succeeding subsections of this 
section) equal to $6,600 with respect to employment has been paid to 
an individual during any calendar year after 1965 and prior to 1968, 
is paid to such individual during such calendar year : 

(5) That part of remuneration which, after remuneration (other 
than remuneration referred to in the succeeding subsections of this 
section) equal to $7,800 with respect to employment has been paid to 
an individual during any calendar year after 1967 and prior to 1972, 
is paid to such individual during such calendar year ; 

(6) That part of remuneration which, after remuneration (other 
than remuneration referred to in the succeeding subsections of this 
section) equal to $9,000 with respect to employment has been paid to 
an individual during any calendar year after 1971 and prior to 1973 
is paid to such individual during such calendar year; 

(7) That part of remuneration which, after remuneration (other 
than remuneration referred to in the succeeding subsections of this 
section) equal to $10,800 with respect to employment has been paid to 



93 



Sec. 209(e) 



an individual during any calendar year after 1972 and prior to 1974, 
is paid to such individual during such calendar year; 

(8) That part of remuneration which, after remuneration (other 
than remuneration referred to in the succeeding subsections of this 
section) equal to $13,200 with respect to employment has been paid 
to an individual during any calendar year after 1973 and prior to 
1975, is paid to such individual during such calendar year; 

(9) That part of remuneration which, after remuneration (other 
than remuneration referred to in the succeeding subsections of this 
section) equal to the contribution and benefit base (determined under 
section 230) 1 with respect to employment has been paid to an individual 
during any calendar year after 1974 with respect to which such con- 
tribution and benefit base is effective, is paid to such individual dur- 
ing such calendar year ; 

(b) The amount of any payment (including any amount paid by an 
employer for insurance or annuities, or into a fund, to provide for any 
such payment) made to, or on behalf of, an employee or any of his 
dependents under a plan or system established by an employer which 
makes provision for his employees generally (or for his employees 
generally and their dependents) or for a class or classes of his 
employees (or for a class or classes of his employees and their depend- 
ents), on account of (1) retirement, or (2) sickness or accident dis- 
ability, or (3) medical or hospitalization expenses in connection with 
sickness or accident disability, or (4) death; 

(c) Any payment made to an employee (including any amount paid 
by an employer for insurance or annuities, or into a fund, to provide 
for any such payment) on account of retirement ; 

(d) Any payment on account of sickness or accident disability, or 
medical or hospitalization expenses in connection with sickness or acci- 
dent disability, made by an employer to, or on behalf of, an employee 
after the expiration of six calendar months following the last calendar 
month in which the employee worked for such employer ; 

(e) Any payment made to, or on behalf of an employee or his bene- 
ficiary (1) from or to a trust exempt from tax under section 165(a) of 
the Internal Revenue Code of 1939 at the time of such payment or, in 
the case of a payment after 1954, under sections 401 and 501(a) of 
the Internal Revenue Code of 1954, unless such payment is made to an 
employee of the trust as remuneration for services rendered as such 
employee and not as a beneficiary of the trust, or (2) under or to an 
annuity plan which, at the time of such payment, meets the require- 
ments of section 165 (a) (3) , (4) , (5) , and (6) of the Internal Revenue 
Code of 1939, or, in the case of a payment after 1954 and prior to 1963, 
the requirements of section 401(a) (3), (4), (5), and (6) of the Inter- 
nal Revenue Code of 1954, or (3) under or to an annuity plan which, 



1 $14,100 for 1975 ; $15,300 for 1976. 



Sec. 209(f) 



94 



at the time of any such payment after 1962, is a plan described in sec- 
tion 403(a) of the Internal Revenue Code of 1954, or (4) under or to 
a bond purchase plan which, at the time of any such payment after 
1962, is a qualified bond purchase plan described in section 405(a) of 
the Internal Revenue Code of 1954 ; 

(f ) The payment by an employer (without deduction from the re- 
muneration of the employee) (1) of the tax imposed upon an employee 
under section 1400 of the Internal Revenue Code of 1939, or in the case 
of a payment after 1954 under section 3101 of the Internal Revenue 
Code of 1954, or (2) of any payment required from an employee 
under a State unemployment compensation law; 

(g) (1) Remuneration paid in any medium other than cash to an 
employee for service not in the course of the employer's trade or busi- 
ness or for domestic service in a private home of the employer ; 

(2) Cash remuneration paid by an employer in any calendar quar- 
ter to an employee for domestic service in a private home of the em- 
ployer, if the cash remuneration paid in such quarter by the employer 
to the employee for such service is less than $50. As used in this para- 
graph, the term "domestic service in a private home of the employer'' 
does not include service described in section 210(f) (5) ; 

(3) Cash remuneration paid by an employer in any calendar quarter 
to an employee for service not in the course of the employer's trade 
or business, if the cash remuneration paid in such quarter by the em- 
ployer to the employee for such service is less than $50. As used in this 
paragraph, the term "service not in the course of the employer's trade 
or business" does not include domestic service in a private home of 
the employer and does not include service described in section 
210(f)(5); 

(h) (1) Remuneration paid in any medium other than cash for agri- 
cultural labor; 

(2) Cash remuneration paid by an employer in any calendar year 
to an employee for agricultural labor unless (A) the cash remunera- 
tion paid in such year by the employer to the employee for such labor 
is $150 or more, or (B) the employee performs agricultural labor for 
the employer on twenty days or more during such year for cash 
remuneration computed on a time basis; 

(i) Any payment (other than vacation or sick pay) made to an em- 
ployee after the month in which he attains age 62 if he did not work 
for the employer in the period for which such payment is made. As 
used in this subsection, the term "sick pay" includes remuneration for 
service in the employ of a State, a political subdivision (as denned in 
section 218(b) (2)) of a State, or an instrumentality of two or more 
States, paid to an employee thereof for a period during which he was 
absent from work because of sickness ; 



95 



Sec. 209(o) 



(j) Remuneration paid by an employer in any quarter to an em- 
ployee for service described in section 210 (j ) (3) (C) (relating to home 
workers), if the cash remuneration paid in such quarter by the em- 
ployer to the employee for such service is less than $50; 

(k) Remuneration paid to or on behalf of an employee if (and to 
the extent that) at the time of the payment of such remuneration it is 
reasonable to believe that a corresponding deduction is allowable under 
section 217 of the Internal Revenue Code of 1954 ; 

(1) (1) Tips paid in any medium other than cash ; 

(2) Cash tips received by an employee in any calendar month in the 
course of his employment by an employer unless the amount of such 
cash tips is $20 or more ; 

(m) Any payment or series of payments by an employer to an 
employee or any of his dependents which is paid — 

(1) upon or after the termination of an employee's employ- 
ment relationship because of (A) death, (B) retirement for dis- 
ability, or (C) retirement after attaining an age specified in the 
plan referred to in paragraph (2) or in a pension plan of the 
employer, and 

(2) under a plan established by the employer which makes 
provision for his employees generally or a class or classes of his 
employees (or for such employees or class or classes of employees 
and their dependents) , 

other than any such payment or series of payments which would have 
been paid if the employee's employment relationship had not been 
so terminated; 

(n) Any payment made by an employer to a survivor or the estate 
of a former employee after the calendar year in which such employee 
died; or 

(o) Any payment made by an employer to an employee, if at the 
time such payment is made such employee is entitled to disability in- 
surance benefits under section 223(a) and such entitlement commenced 
prior to the calendar year in which such payment is made, and if such 
employee did not perform any services for such employer during the 
period for which such payment is made. 

For purposes of this title, in the case of domestic service described in 
subsection (g) (2), any payment of cash remuneration for such service 
which is more or less than a whole-dollar amount shall, under such 
conditions and to such extent as may be prescribed by regulations made 
under this title, be computed to the nearest dollar. For the purpose of 
the computation to the nearest dollar, the payment of a fractional part 
of a dollar shall be disregarded unless it amounts to one-half dollar or 
more, in which case it shall be increased to $1. The amount of any pay- 
ment of cash remuneration so computed to the nearest dollar shall, in 



Sec. 210 



96 



lieu of the amount actually paid, be deemed to constitute the amount 
of cash remuneration for purposes of subsection (g) (2). 

For purposes of this title, in the case of an individual performing 
service, as a member of a uniformed service, to which the provisions 
of section 210(1) (1) are applicable, the term "wages" shall, subject to 
the provisions of subsection (a) of this section, include as such individ- 
ual's remuneration for such service only his basic pay as described in 
section 102(10) of the Servicemen's and Veterans' Survivor Benefits 
Act. 

For purposes of this title, in the case of an individual performing 
service, as a volunteer or volunteer leader within the meaning of the 
Peace Corps Act, to which the provisions of section 210 (o) are appli- 
cable, (1) the term "wages" shall, subject to the provisions of subsec- 
tion (a) of this section, include as such individual's remuneration for 
such service only amounts certified as payable pursuant to section 5(c) 
or 6(1) of the Peace Corps Act, and (2) any such amount shall be 
deemed to have been paid to such individual at the time the service, 
with respect to which it is paid, is performed. 

For purposes of this title, tips received by an employee in the course 
of his employment shall be considered remuneration for employment. 
Such remuneration shall be deemed to be paid at the time a written 
statement including such tips is furnished to the employer pursuant to 
section 6053(a) of the Internal Revenue Code of 1954 or (if no state- 
ment including such tips is so furnished) at the time received. 

For purposes of this title, in any case where an individual is a mem- 
ber of a religious order (as defined in section 3121 (r) (2) of the Inter- 
nal Revenue Code of 1954) performing service in the exercise of duties 
required by such order, and an election of coverage under section 3121 
(r) of such Code is in effect with respect to such order or with respect 
to the autonomous subdivision thereof to which such member belongs, 
the term "wages" shall, subject to the provisions of subsection (a) of 
this section, include as such individual's remuneration for such service 
the fair market value of any board, lodging, clothing, and other per- 
quisites furnished to such member by such order or subdivision 
thereof or by any other person or organization pursuant to an agree- 
ment with such order or subdivision, except that the amount included 
as such individual's remuneration under this paragraph shall not be 
less than $100 a month. 

Definition of Employment 
Sec. 210. For the purposes of this title — 

Employment 

(a) The term "employment" means any service performed after 
1036 and prior to 1951 which was employment for the purposes of this 



97 



Sec. 210(a) 



title under the law applicable to the period in which such service was 
performed, and any service, of whatever nature, performed after 1950 
either (A) by an employee for the person employing him, irrespective 
of the citizenship or residence of either, (i) within the United States, 
or (ii) on or in connection with an American vessel or American air- 
craft under a contract of service which is entered into within the 
United States or during the performance of which and while the 
employee is employed on the vessel or aircraft it touches at a port in 
the United States, if the employee is employed on and in connection 
with such vessel or aircraft when outside the United States, or (B) 
outside the United States by a citizen of the United States as an 
employee (i) of an American employer (as defined in subsection (e) ), 
or (ii) of a foreign subsidiary (as defined in section 3121(1) of the 
Internal Revenue Code of 1954) of a domestic corporation (as deter- 
mined in accordance with section 7701 of the Internal Revenue Code 
of 1954) during any period for which there is in effect an agreement, 
entered into pursuant to section 3121(1) of the Internal Revenue Code 
of 1954, with respect to such subsidiary; except that, in the case of 
service performed after 1950, such term shall not include — 

(1) Service performed by foreign agricultural workers (A) 
under contracts entered into in accordance with title V of the 
Agricultural Act of 1949. as amended, or (B) lawfully admitted 
to the United States from the Bahamas, Jamaica, and the other 
British West Indies, or from any other foreign country or posses- 
sion thereof, on a temporary basis to perform agricultural labor ; 

(2) Domestic service performed in a local college club, or local 
chapter of a college fraternity or sorority, by a student who is 
enrolled and is regularly attending classes at a school, college, or 
university ; 

(3) (A) Service performed by an individual in the employ of 
his spouse, and service performed by a child under the age of 
twenty-one in the employ of his father or mother ; 

(B) Service not in the course of the employers trade or busi- 
ness, or domestic service in a private home of the employer, per- 
formed by an individual in the employ of his son or daughter; 
except that the provisions of this subparagraph shall not be 
applicable to such domestic service if — 

(i) the employer is a surviving spouse or a divorced indi- 
vidual and has not remarried, or has a spouse living in the 
home who has a mental or physical condition which results in 
such spouse's being incapable of caring for a son, daughter, 
stepson, or stepdaughter (referred to in clause (ii)) for at 
least 4 continuous weeks in the calendar quarter in which the 
service is rendered, and 



Sec. 210(a) 



98 



(ii) a son, daughter, stepson, or stepdaughter of such em- 
ployer is living in the home, and 

(iii) the son, daughter, stepson, or stepdaughter (referred 
to in clause (ii) has not attained age 18 or has a mental or 
physical condition which requires the personal care and super- 
vision of an adult for at least 4 continuous weeks in the cal- 
lendar quarter in which the service is rendered ; 

(4) Service performed by an individual on or in connection 
with a vessel not an American vessel, or on or in connection with 
an aircraft not an American aircraft, if (A) the individual is 
employed on and in connection with such vessel or aircraft when 
outside the United States and (B) (i) such individual is not a 
citizen of the United States or (ii) the employer is not an Amer- 
ican employer; 

(5) Service performed in the employ of any instrumentality 
of the United States, if such instrumentality is exempt from the 
tax imposed by section 3111 of the Internal Revenue Code of 
1954 by virtue of any provision of law which specifically refers 
to such section in granting such exemption ; 

(6) (A) Service performed in the employ of the United States 
or in the employ of any instrumentality of the United States, if 
such service is covered by a retirement system established by a law 
of the United States ; 

(B) Service performed by an individual in the employ of an 
instrumentality of the United States if such an instrumentality 
was exempt from the tax imposed by section 1410 of the Internal 
Revenue Code of 1939 on December 31, 1950, and if such service 
is covered by a retirement system established by such instru- 
mentality; except that the provisions of this subparagraph shall 
not be applicable to — 

(i) service performed in the employ of a corporation which 
is wholly owned by the United States ; 

(ii) service performed in the employ of a Federal land 
bank, a Federal intermediate credit bank, a bank for cooper- 
atives, a Federal land bank association, a production credit 
association, a Federal Reserve Bank, a Federal Home Loan 
Bank, or a Federal Credit Union ; 

(iii) service performed in the employ of a State, county, 
or communitv committee under the Production and Market- 
ing Administration ; 

(iv) service performed by a civilian employee, not com- 
pensated from funds appropriated by the Congress, in the 
Army and Air Force Exchange Service, Army and Air Force 



99 



Sec. 210(a) 



Motion Picture Service, Navy Exchanges, Marine Corps Ex- 
changes, or other activities, conducted by an instrumentality 
of the United States subject to the jurisdiction of the Secre- 
tary of Defense, at installations of the Department of De- 
fense for the comfort, pleasure, contentment, and mental and 
physical improvement of personnel of such Department; or 
(v) service performed by a civilian employee, not compen- 
sated from funds appropriated by the Congress, in the Coast 
Guard Exchanges or other activities, conducted by an instru- 
mentality of the United States subject to the jurisdiction of 
the Secretary of the Treasury, at installations of the Coast 
Guard for the comfort, pleasure, contentment, and mental 
and physical improvement of personnel of the Coast Guard ; 
(C) Service performed in the employ of the United States or 

in the employ of any instrumentality of the United States, if such 

service is performed — 

(i) as the President or Vice President of the United States 
or as a Member, Delegate, or Resident Commissioner of or to 
the Congress; 

(ii) in the legislative branch; 

(iii) in a penal institution of the United States by an in- 
mate thereof ; 

(iv) by any individual as an employee included under sec- 
tion 5351(2) of title 5, United States Code (relating to cer- 
tain interns, student nurses, and other student employees of 
hospitals of the Federal Government), other than as a medi- 
cal or dental intern or a medical or dental resident in 
training ; 

(v) by any individual as an employee serving on a tempo- 
rary basis in case of fire, storm, earthquake, flood, or other 
similar emergency ; or 

(vi) by any individual to whom subchapter III of chapter 
83 of title 5, United States Code, does not apply because such 
individual is subject to another retirement system other than 
the retirement system of the Tennessee Valley Authority) ; 

(7) Service performed in the employ of a State, or any political 
subdivision thereof, or any instrumentality of any one or more of 
the foregoing which is wholly owned thereby, except that this 
paragraph shall not apply in the case of — 

(A) service included under an agreement under section 218, 

(B) service which, under subsection (k), constitutes covered 
transportation service, 



Sec. 210(a) 



100 



(C) service in the employ of the Government of Guam or the 
Government of American Samoa or any political subdivision 
thereof, or of any instrumentality of any one or more of the fore- 
going which is wholly owned thereby, performed by an officer 
or employee thereof (including a member of the legislature of 
any such Government or political subdivision), and, for purposes 
of this title — 

(i) any person whose service as such an officer or employee 
is not covered by a retirement system established by a law 
of the United States shall not, with respect to such service, be 
regarded as an officer or employee of the United States or any 
agency or instrumentality thereof, and 

(ii) the remuneration for service described in clause (i) 
(including fees paid to a public official) shall be deemed to 
have been paid by the Government of Guam or the Govern- 
ment of American Samoa or by a political subdivision thereof 
or an instrumentality of any one or more of the foregoing 
which is wholly owned thereby, whichever is approriate, 

(D) service performed in the employ of the District of Colum- 
bia or any instrumentality which is wholly owned thereby, if 
such service is not covered by a retirement system established by 
a law of the United States ; except that the provisions of this sub- 
paragraph shall not be applicable to service performed — 

(i) in a hospital or penal institution by a patient or inmate 
thereof ; 

(ii) by any individual as an employee included under sec- 
tion 5351 (2) of title 5, United States Code (relating to certain 
interns, student nurses, and other student employees of hos- 
pitals of the District of Columbia Government), other than 
as a medical or dental intern or as a medical or dental resident 
in training ; 

(iii) by any individual as an employee serving on a tem- 
porary basis in case of fire, storm, snow, earthquake, flood, or 
other similar emergency; or 

(iv) by a member of a board, committee, or council of the 
District of Columbia, paid on a per diem, meeting, or other 
fee basis, or 

(E) service performed in the employ of the Government of 
Guam (or any instrumentality which is wholly owned by such 
Government) by an employee properly classified as a temporary or 
intermittent employee, if such service is not covered by a re- 
tirement system established by a law of Guam; except that (i) 
the provisions of this subparagraph shall not be applicable to 
services performed by an elected official or a member of the legis- 



101 



Sec. 210(a) 



lature or in a hospital or penal institution by a patient or inmate 
thereof, and (ii) for purposes of this subparagraph, clauses (i) 
and (ii) of subparagraph (C) shall apply; 

(8) (A) Service performed by a duly ordained, commissioned, 
or licensed minister of a church in the exercise of his ministry or 
by a member of a religious order in the exercise of duties required 
by such order, except that this subparagraph shall not apply to 
service performed by a member of such an order in the exercise of 
such duties, if an election of coverage under section 3121 (r) of the 
Internal Revenue Code of 1954 is in effect with respect to such 
order, or with respect to the autonomous subdivision thereof to 
which such member belongs ; 

(B) Service performed in the employ of a religious, charitable, 
educational, or other organization described in section 501(c) (3) 
of the Internal Revenue Code of 1954, which is exempt from in- 
come tax under section 501(a) of such Code, but this subpara- 
graph shall not apply to service performed during the period for 
which a certificate, filed pursuant to section 3121 (k) of the In- 
ternal Revenue Code of 1954, is in effect if such service is per- 
formed by an employee — 

(i) whose signature appears on the list filed by such orga- 
nization under such section 3121 (k) , 

(ii) who became an employee of such organization after 
the calendar quarter in which the certificate (other than a 
certificate referred to in clause (iii) ) was filed, or 

(iii) who, after the calendar quarter in which the certifi- 
cate was filed with respect to a group described in paragraph 
(1) (E) of such section 3121 (k), became a member of such 

group, \ ■ 1 (f ' ^^ f^^^^y^ffl^^ i ' 1 
except that this subparagraph shall apply with respect to serv- 
ice performed by an employee as a member of a group described 
in such paragraph (1) (E) with respect to which no certificate is 
in effect ; 

(9) Service performed by an individual as an employee or 
employee representative as defined in section 3231 of the Internal 
Revenue Code of 1954 ; 

(10) (A) Service performed in any calendar quarter in the 
employ of any organization exempt from income tax under section 
501 of the Internal Revenue Code of 1954, if the remuneration 
for such service is less than $50 ; 

(B) Service performed in the employ of — 

(i) a school, college, or university, or 

(ii) an organization described in section 509(a) (3) of the 
Internal Revenue Code of 1954 if the organization is orga- 



Sec. 210(a) 



102 



nized, and at all times thereafter is operated, exclusively for 
the benefit of, to perform the functions of, or to carry out 
the purposes of a school, college, or university and is oper- 
ated, supervised, or controlled by or in connection with such 
school, college, or university, unless it is a school, college, or 
university of a State or a political subdivision thereof and 
the services in its employ performed by a student referred to 
in section 218 (c) (5) are covered under the agreement between 
the Secretary of Health, Education, and Welfare and such 
State entered into pursuant to section 218 ; 
if such service is performed by a student who is enrolled and regularly 
attending classes at such school, college, or university ; 

(11) Service performed in the employ of a foreign government 
(including service as a consular or other officer or employee or a 
nondiplomatic representative) ; 

(12) Service performed in the employ of an instrumentality 
wholly owned by a foreign government — 

(A) If the service is of a character similar to that per- 
formed in foreign countries by employees of the United States 
Government or of an instrumentality thereof; and 

(B) If the Secretary of State shall certify to the Secre- 
tary of the Treasury that the foreign government, with re- 
spect to whose instrumentality and employees thereof exemp- 
tion is claimed, grants an equivalent exemption with respect 
to similar service performed in the foreign country by em- 
ployees of the United States Government and of instrumen- 
talities thereof ; 

(13) Service performed as a student nurse in the employ of a 
hospital or a nurses' training school by an individual who is 
enrolled and is regularly attending classes in a nurses' training 
school chartered or approved pursuant to State law ; 

(14) (A) Service performed by an individual under the age of 
eighteen in the delivery or distribution of newspapers or shop- 
ping news, not including delivery or distribution to any point for 
subsequent delivery or distribution ; 

(B) Service performed by an individual in, and at the time of, 
the sale of newspapers or magazines to ultimate consumers, under 
an arrangement under which the newspapers or magazines are to 
be sold by him at a fixed price, his compensation being based on 
the retention of the excess of such price over the amount at which 
the newspapers or magazines are charged to him, whether or not 
he is guaranteed a minimum amount of compensation for such 
service, or is entitled to be credited with the unsold newspapers 
or magazines turned back ; 



103 



Sec. 210(b) 



(15) Service performed in the employ of an international or- 
ganization entitled to enjoy privileges, exemptions, and immuni- 
ties as an international organization under the International Or- 
ganizations Immunities Act (59 Stat. 669) ; 

(16) Service performed by an individual under an arrange- 
ment with the owner or tenant of land pursuant to which — 

(A) such individual undertakes to produce agricultural or 
horticultural commodities (including livestock, bees, poultry, 
and fur-bearing animals and wildlife) on such land, 

( B ) the agricultural or horticultural commodities produced 
by such individual, or the proceeds therefrom, are to be di- 
vided between such individual and such owner or tenant, and 

(C) the amount of such individual's share depends on the 
amount of the agricultural or horticultural commodities 
produced ; 

(17) Service in the employ of any organization which is per- 
formed (A) in any quarter during any part of which such orga- 
nization is registered, or there is in effect a final order of the Sub- 
versive Activities Control Board requiring such organization to 
register, under the Internal Security Act of 1950, as amended, as 
a Communist-action organization, a Communist-front organiza- 
tion, or a Communist-infiltrated organization, and (B) after June 
30,1950';. ;•' J [ p lt . ' ] : ^^^.i fc Uqpi 

(18) Service performed in Guam by a resident of the Republic 
of the Philippines while in Guam on a temporary basis as a non- 
immigrant alien admitted to Guam pursuant to section 101(a) 
(15) (H) (ii) of the Immigration and Nationality Act (8 U.S.C. 
1101(a) (15) (H)(ii)); or 

(19) Service which is performed by a nonresident alien indi- 
vidual for the period he is temporarily present in the United 
States as a nonimmigrant under subparagraph (F) or (J) of 
section 101(a) (15) of the Immigration and Nationality Act, as 
amended, and which is performed to carry out the purpose speci- 
fied in subparagraph (F) or (J), as the case may be. 

Included and Excluded Service 

(b) If the services performed during one-half or more of any pay 
period by an employee for the person employing him constitute em- 
ployment, all the services of such employee for such period shall be 
deemed to be employment : but if the services performed during more 
than one-half of any such pay period by an employee for the person 
employing him do not constitute employment, then none of the serv- 
ices of such employee for such period shall be deemed to be employ- 
ment. As used in this subsection, the term "pay period'' means a period 



Sec. 210(c) 104 

(of not more than thirty-one consecutive days) for which a payment 
of remuneration is ordinarily made to the employee by the person 
employing him. This subsection shall not be applicable with respect to 
services performed in a pay period by an employee for the person 
employing him, where any of such service is excepted by paragraph 
(9) of subsection (a). 

American Vessel 

(c) The term "American vessel" means any vessel documented or 
numbered under the laws of the United States ; and includes any ves- 
sel which is neither documented or numbered under the laws of the 
United States or documented under the laws of any foreign country, 
if its crew is employed solelv bv one or more citizens or residents of 
the United States or corporations organized under the laws of the 
United States or of any State. 

American Aircraft 

(d) The term "American aircraft" means an aircraft registered 
under the laws of the United States. 

American Employer 

(e) The term "American employer" means an employer which is 
(1) the United States or any instrumentality thereof, (2) a State or 
any political subdivision thereof, or any instrumentality of any one or 
more of the foregoing, (3) an individual who is a resident of the 
United States, (4) a partnership, if two-thirds or more of the partners 
are residents of the United States, (5) a trust, if all of the trustees are 
residents of the United States, or (6) a corporation organized under 
the laws of the United States or of any State. 

Agricultural Labor 

(f ) The term "agricultural labor" includes all service performed — 

(1) On a farm, in the employ of any person, in connection with 
cultivating the soil, or in connection with raising or harvesting 
any agricultural or horticultural commodity, including the rais- 
ing, shearing, feeding, caring for, training, and management of 
livestock, bees, poultry, and fur-bearing animals and wildlife. 

(2) In the employ of the owner or tenant or other operator of a 
farm, in connection with the operation, management, conserva- 
tion, improvement, or maintenance of such farm and its tools and 
equipment, or in salvaging timber or clearing land of brush and 
other debris left by a hurricane, if the major part of such serv- 
ice is performed on a farm. 

(3) In connection with the production or harvesting of any 
commodity defined as an agricultural commodity in section 15(g) 
of the Agricultural Marketing Act, as amended, or in connection 
with the ginning of cotton, or in connection with the operation 



105 



Sec. 210(j) 



or maintenance of ditches, canals, reservoirs, or waterways, not 
owned or operated for profit, used exclusively for supplying and 
storing water for farming purposes. 

(4) (A) In the employ of the operator of a farm in handling, 
planting, drying, packing, packaging, processing, freezing, grad- 
ing, storing, or delivering to storage or to market or to a carrier 
for transportation to market in its unmanufactured state, any 
agricultural or horticultural commodity ; but only if such operator 
produced more than one-half of the commodity with respect to 
which such service is performed. 

(B) In the employ of a group of operators of farms (other than 
a cooperative organization) in the performance of service de- 
scribed in subparagraph ( A) , but only if such operators produced 
all of the commodity with respect to which such service is per- 
formed. For the purposes of this subparagraph, any unincorpo- 
rated group of operators shall be deemed a cooperative organiza- 
tion if the number of operators comprising such group is more 
than twenty at any time during the calendar quarter in which 
such service is performed. 

(5) On a farm operated for profit if such service is not in the 
course of the employer's trade or business or is domestic service 
in a private home of the employer. 

The provisions of subparagraphs (A) and (B) of paragraph (4) 
shall not be deemed to be applicable with respect to service performed 
in connection with commercial canning or commercial freezing or in 
connection with any agricultural or horticultural commodity after its 
delivery to a terminal market for distribution for consumption. 

Farm 

(g) The term "farm" includes stock, dairy, poultry, fruit, fur-bear- 
ing animal and truck farms, plantations, ranches, nurseries, ranges, 
greenhouses or other similar structures used primarily for the raising 
of agricultural or horticultural commodities and orchards. 

State 

(h) The term "State" includes the District of Columbia, the Com- 
monwealth of Puerto Rico, the Virgin Islands, Guam, and American 
Samoa. 

United States 

(i) The term "United States" when used in a geographical sense 
means the States, the District of Columbia, the Commonwealth of 
Puerto Rico, the Virgin Islands, Guam, and American Samoa. 

Employee 

(j) The term "employee" means — 

(1) any officer of a corporation ; or 



64-310 O - 76 - 8 



Sec. 210(k) 



106 



(2) any individual who, under the usual common law rules 
applicable in determining the employer-employee relationship, 
has the status of an employee ; or 

(3) any individual (other than an individual who is an em- 
ployee under paragraph (1) or (2) of this subsection) who per- 
forms services for remuneration for any person — 

(A) as an agent-driver or commission-driver engaged in 
distributing meat products, vegetable products, fruit prod- 
ucts, bakery products, beverages (other than milk), or laun- 
dry or drycleaning services, for his principal ; 

( B ) as a full-time insurance salesman ; 

(C) as a home worker performing work, according to 
specifications furnished by the person for whom the services 

are performed, on materials or goods furnished by such per- 
son which are required to be returned to such person or a 
person designated by him ; or 

(D) as a traveling or city salesman, other than as an agent- 
driver or commission-driver, engaged upon a full-time basis 
in the solicitation on behalf of, and the transmission to, his 
principal (except for side-line sales activities on behalf of 
some other person) of orders from wholesalers, retailers, con- 
tractors, or operators of hotels, restaurants, or other similar 
establishments for merchandise for resale or supplies for use 
in their business operations ; 

if the contract of service contemplates that substantially all of 
such services are to be performed personally by such individual ; 
except that an individual shall not be included in the term "em- 
ployee" under the provisions of this paragraph if such individual 
has a substantial investment in facilities used in connection with 
the performance of such services (other than in facilities for 
transportation), or if the services are in the nature of a single 
transaction not part of a continuing relationship with the person 
for whom the services are performed. 

Covered Transportation Service 

(k)(l) Except as provided in paragraph (2), all services per- 
formed in the employ of a State or political subdivision in connection 
with its operation of a public transportation system shall constitute 
covered transportation service if any part of the transportation sys- 
tem was acquired from private ownership after 1936 and prior to 1951. 

(2) Service performed in the employ of a State or political subdivi- 
sion in connection with the operation of its public transportation sys- 
tem shall not constitute covered transportation service if — 



107 Sec. 210(k) 

(A) any part of the transportation system was acquired from 
private ownership after 1936 and prior to 1951, and substantially 
all service in connection with the operation of the transportation 
system is, on December 31, 1950, covered under a general retire- 
ment system providing benefits which, by reason of a provision 
of the State's constitution dealing specifically with retirement sys- 
tems of the State or political subdivisions thereof, cannot be 
diminished or impaired ; or 

(B) no part of the transportation system operated by the State 
or political subdivision on December 31, 1950, was acquired from 
private ownership after 1936 and prior to 1951 ; 

except that if such State or political subdivision makes an acquisition 
after 1950 from private ownership of any part of its transportation 
system, then, in the case of any employee who — 

(C) became an employee of such State or political subdivision 
in connection with and at the time of its acquisition after 1950 of 
such part, and 

(D) prior to such acquisition rendered service in employment 
in connection with the operation of such part of the transporta- 
tion system acquired by the State or political subdivision, 

the service of such employee in connection with the operation of the 

transportation system shall constitute covered transportation service, 
commencing with the first day of the third calendar quarter following 
the calendar quarter in which the acquisition of such part took place, 
unless on such first day such service of such employee is covered by a 
general retirement system which does not, with respect to such em- 
ployee, contain special provisions applicable only to employees de- 
scribed in subparagraph ( C) . 

(3) All service performed in the employ of a State or political sub- 
division thereof in connection with its operation of a public trans- 
portation system shall constitute covered transportation service if the 
transportation system was not operated by the State or political sub- 
division prior to 1951 and, at the time of its first acquisition (after 
1950) from private ownership of any part of its transportation system, 
the State or political subdivision did not have a general retirement 
system covering substantially all service performed in connection with 
the operation of the transportation system. 

(4) For the purposes of this subsection — 

(A) The term "general retirement system" means any pension, 
annuity, retirement, or similar fund or system established by a 
State or by a political subdivision thereof for employees of the 
State, political subdivision, or both; but such term shall not in- 



Sec. 210(1) 



108 



elude such a fund or system which covers only service performed 
in positions connected with the operation of its public transporta- 
tion system. 

(B) A transportation system or a part thereof shall be con- 
sidered to have been acquired by a State or political subdivision 
from private ownership if prior to the acquisition service per- 
formed by employees in connection with the operation of the 
system or part thereof acquired constituted employment under 
this title, and some of such employees become employees of the 
State or political subdivision in connection with and at the time 
of such acquisition. 

(C) The term "political subdivision" includes an instrumen- 
tality of (i) a State, (ii) one or more political subdivisions of a 
State, or (iii) a State and one or more of its political subdivisions. 

Service in the Uniformed Services 

(1) (1) Except as provided in paragraph (4), the term "employ- 
ment" shall, notwithstanding the provisions of subsection (a) of this 
section, include service performed after December 1956 by an individ- 
ual as a member of a uniformed service on active duty ; but such term 
shall not include any such service which is performed while on leave 
without pay. 

(2) The term "active duty" means "active duty" as described in 
section 102 of the Servicemen's and Veterans' Survivor Benefits Act, 
except that it shall also include "active duty for training" as described 
in such section. 

(3) The term "inactive duty training" means "inactive duty train- 
ing" as described in such section 102. 

(4) (A) Paragraph (1) of this subsection shall not apply in the 
case of any service, performed by an individual as a member of a 
uniformed service, which is creditable under section 3(i) of the Rail- 
road Retirement Act of 1974. The Railroad Retirement Board shall 
notify the Secretary of Health, Education, and Welfare, with respect 
to all such service which is so creditable. 

(B) In any case where benefits under this title are already payable 
on the basis of such individual's wages and self -employment income 
at the time such notification (with respect to such individual) is re- 
ceived by the Secretary, the Secretary shall certify no further bene- 
fits for payment under this title on the basis of such individual's wages 
and self -employment income, or shall recompute the amount of any 
further benefits payable on the basis of such wages and self-employ- 
ment income, as may be required as a consequence of subparagraph 
(A) of this paragraph. No payment of a benefit to any person on the 



109 



Sec. 210(m) 



basis of such individual's wages and self-employment income, cer- 
tified by the Secretary prior to the end of the month in which he 
receives such notification from the Railroad Retirement Board, shall 
be deemed by reason of this subparagraph to have been an erroneous 
payment or a payment to which such person was not entitled. The 
Secretary shall, as soon as possible after the receipt of such notifica- 
tion from the Railroad Retirement Board, advise such Board whether 
or not any such benefit will be reduced or terminated by reason of sub- 
paragraph (A), and if any such benefit will be so reduced or ter- 
minated, specify the first month with respect to which such reduction 
or termination will be effective. 

Member of a Uniformed Service 

(m) The term "member of a uniformed service" means any person 
appointed, enlisted, or inducted in a component of the Army, Navy, 
Air Force, Marine Corps, or Coast Guard (including a reserve com- 
ponent of a uniformed service as defined in section 102(3) of the Serv- 
icemen's and Veterans' Survivor Benefits Act) or in one of those 
services without specification of component, or as a commissioned 
officer of the Coast and Geodetic Survey or the Regular or Reserve 
Corps of the Public Health Service, and any person serving in the 
Army or Air Force under call or conscription. The term includes — 

(1) a retired member of any of those services; 

(2) a member of the Fleet Reserve or Fleet Marine Corps 
Reserve ; 

(3) a cadet at the United States Military Academy, a midship- 
man at the United States Naval Academy, and a cadet at the 
United States Coast Guard Academy or United States Air Force 
Academy ; 

(4) a member of the Reserve Officers' Training Corps, the 
Naval Reserve Officers' Training Corps, or the Air Force Reserve 
Officers' Training Corps, when ordered to annual training duty 
for fourteen days or more, and while performing authorized 
travel to and from that duty ; and 

(5) any person while en route to or from or at, a place for 
final acceptance or for entry upon active duty in the military or 
naval service — 

(A) who has been provisionally accepted for such duty; or 

(B) who, under the Universal Military Training and Serv- 
ice Act, has been selected for active military or naval service ; 

and has been ordered or directed to proceed to such place. 
The term does not include a temporary member of the Coast Guard 
Reserve. 



Sec. 210(n) 



110 



Crew Leader 

(n) The term "crew leader" means an individual who furnishes 
individuals to perform agricultural labor for another person, if such 
individual pays (either on his own behalf or on behalf of such per- 
son) the individuals so furnished by him for the agricultural labor 
performed by them and if such individual has not entered into a writ- 
ten agreement with such person whereby such individual has been des- 
ignated as an employee of such person ; and such individuals furnished 
by the crew leader to perform agricultural labor for another person 
shall be deemed to be the employees of such crew leader. A crew leader 
shall, with respect to services performed in furnishing individuals to 
perform agricultural labor for another person and service performed 
as a member of the crew, be deemed not to be an employee of such 
other person. 

Peace Corps Volunteer Service 

(o) The term "employment" shall, notwithstanding the provisions 
of subsection (a), include service performed by an individual as a 
volunteer or volunteer leader within the meaning of the Peace Corps 
Act. 

Self-Employment 
Sec. 211. For the purposes of this title — 

Net Earnings From Self-Employment 

(a) The term "net earnings from self -employment" means the gross 
income, as computed under Subtitle A of the Internal Revenue Code 
of 1954, derived by an individual from any trade or business carried 
on by such individual, less the deductions allowed under such subtitle 
which are attributable to such trade or business, plus his distribu- 
tive share (whether or not distributed) of income or loss described 
in section 702(a) (9) of the Internal Revenue Code of 1954, from any 
trade or business carried on by a partnership of which he is a member ; 
except that in computing such gross income and deductions and such 
distributive share of partnership ordinary income or loss — 

(1) There shall be excluded rentals from real estate and from 
personal property leased with the real estate (including such 
rentals paid in crop shares), together with the deductions at- 
tributable thereto, unless such rentals are received in the course 
of a trade or business as a real estate dealer ; except that the pre- 
ceding provisions of this paragraph shall not apply to any income 
derived by the owner or tenant of land if (A) such income is 
derived under an arrangement, between the owner or tenant and 
another individual which provides that such other individual 
shall produce agricultural or horticultural commodities (includ- 
ing livestock, bees, poultry, and fur-bearing animals and wild- 



Ill 



Sec. 211(a) 



life) on such land, and that there shall be material participation 
by the owner or tenant (as determined without regard to any activ- 
ities of an agent of such owner or tenant) in the production or the 
management of the production of such agricultural or horticul- 
tural commodities, and (B) there is material participation by the 
owner or tenant (as determined without regard to any activities 
of an agent of such owner or tenant) with respect to any such agri- 
cultural or horticultural commodity ; 

(2) There shall be excluded dividends on any share of stock, 
and interest on any bond, debenture, note, or certificate, or other 
evidence of indebtedness, issued with interest coupons or in regis- 
tered form by any corporation (including one issued by a govern- 
ment or political subdivision thereof), unless such dividends and 
interest (other than interest described in section 35 of the Internal 
Revenue Code of 1954) are received in the course of a trade or 
business as a dealer in stocks or securities ; 

(3) There shall be excluded any gain or loss (A) which is con- 
sidered under Subtitle A of the Internal Revenue Code of 1954 as 
gain or loss from the sale or exchange of a capital asset, (B) from 
the cutting of timber or the disposal of timber, coal, or iron ore, if 
section 631 of the Internal Revenue Code of 1954 applies to such 
gain or loss, or (C) from the sale, exchange, involuntary conver- 
sion, or other disposition of property if such property is neither 
(i) stock in trade or other property of a kind which would prop- 
erly be includible in inventory if on hand at the close of the tax- 
able year, nor (ii) property held primarily for sale to customers 
in the ordinary course of the trade or business ; 

(4) The deduction for net operating losses provided in section 
172 of such Code shall not be allowed ; 

(5) (A) If any of the income derived from a trade or business 
(other than a trade or business carried on by a partnership) is 
community income under community property laws applicable to 
such income, all of the gross income and deductions attributable 
to such trade or business shall be treated as the gross income and 
deductions of the husband unless the wife exercises substantially 
all of the management and control of such trade or business, in 
which case all of such gross income and deductions shall be treated 
as the gross income and deductions of the wife ; 

(B) If any portion of a partner's distributive share of the ordi- 
nary net income or loss from a trade or business carried on by a 
partnership is community income or loss under the community 
property laws applicable to such share, all of such distributive 
share shall be included in computing the net earnings from self- 
employment of such partner, and no part of such share shall be 



Sec. 211(a) 



112 



taken into account in computing the net earnings from self-em- 
ployment of the spouse of such partner ; 

(6) A resident of the Commonwealth of Puerto Rico shall com- 
pute his net earnings from self-employment in the same manner as 
a citizen of the United States but without regard to the provisions 
of section 933 of the Internal Revenue Code of 1954 ; 

(7) An individual who is a duly ordained, commissioned, or 
licensed minister of a church or a member of a religious order 
shall compute his net earnings from self -employment derived 
from the performance of service described in subsection (c) (4) 
without regard to section 107 (relating to rental value of par- 
sonages), section 119 (relating to meals and lodging furnished 
for the convenience of the employer) and section 911 (relating 
to earned income from sources without the United States), and 
section 931 (relating to income from sources within possessions 
of the United States) of the Internal Revenue Code of 1954; 

(8) The term "possession of the United States" as used in sec- 
tions 931 (relating to income from sources within possessions of 
the United States) and 932 (relating to citizens of possessions 
of the United States) of the Internal Revenue Code of 1954 shall 
be deemed not to include the Virgin Islands, Guam, or American 
Samoa ; 

(9) There shall be excluded amounts received by a partner 
pursuant to a written plan of the partnership, which meets such 
requirements as are prescribed by the Secretary of the Treasury 
or his delegate, and which provides for payments on account of 
retirement, on a periodic basis, to partners generally or to a class 
or classes of partners, such payments to continue at least until 
such partner's death, if — 

(A) such partner rendered no services with respect to 
any trade or business carried on by such partnership (or its 
successors) during the taxable year of such partnership (or 
its successors), ending within or with his taxable year, in 
which such amounts were received, and 

(B) no obligation exists (as of the close of the partner- 
ship's taxable year referred to in subparagraph ( A) ) from 
the other partners to such partner except with respect to 
retirement payments under such plan, and 

(C) such partner's share, if any of the capital of the 
partnership has been paid to him in full before the close of 
the partnership's taxable year referred to in subparagraph 
(A) ; and 

(10) In the case of an individual who has been a resident of the 
United States during the entire taxable year, the exclusion from 



113 



Sec. 211(a) 



gross income provided by section 911(a) (2) of the Internal Rev- 
enue Code of 1954 shall not apply. 
If the taxable year of a partner is different from that of the partner- 
ship, the distributive share which he is required to include in com- 
puting his net earnings from self-employment shall be based upon 
the ordinary net income or loss of the partnership for any taxable 
year of the partnership (even though beginning prior to 1951) end- 
ing within or with his taxable year. In the case of any trade or busi- 
ness which is carried on by an individual or by a partnership and in 
which, if such trade or business were carried on exclusively by em- 
ployees, the major portion of the services would constitute agricul- 
tural labor as defined in section 210(f) — 

(i) in the case of an individual, if the gross income derived by 
him from such trade or business is not more than $2,400, the net 
earnings from self-employment derived by him from such trade 
or business may, at his option, be deemed to be 66% percent of 
such gross income; or 

(ii) in the case of an individual, if the gross income derived by 
him from such trade or business is more than $2,400 and the net 
earnings from self-employment derived by him from such trade 
or business (computed under this subsection without regard to 
this sentence) are less than $1,600, the net earnings from self- 
employment derived by him from such trade or business may, at 
his option, be deemed to be $1,600 ; and 

(iii) in the case of a member of a partnership, if his distribu- 
tive share of the gross income of the partnership derived from 
such trade or business (after such gross income has been reduced 
by the sum of all payments to which section 707(c) of the In- 
ternal Revenue Code of 1954 applies) is not more than $2,400, 
his distributive share of income described in section 702(a) (9) of 
such Code derived from such trade or business may. at his option, 
be deemed to be an amount equal to 66% percent of his distribu- 
tive share of such gross income (after such gross income has been 
so reduced) ; or 

(iv) in the case of a member of a partnership, if his distributive 
share of the gross income of the partnership derived from such 
trade or business (after such gross income has been reduced by 
the sum of all payments to which section 707 (c) of the Internal 
Revenue Code of 1954 applies) is more than $2,400 and his dis- 
tributive share (whether or not distributed) of income described 
in section 702(a) (9) of such Code derived from such trade or 
business (computed under this subsection without regard to this 
sentence) is less than $1,600, his distributive share of income de- 



Sec. 211(b) 



114 



scribed in such section 702(a)(9) derived from such trade or 
business may, at his option, be deemed to be $1,600. 
For purposes of the preceding sentence, gross income means — 

(v) in the case of any such trade or business in which the income 
is computed under a cash receipts and disbursements method, the 
gross receipts from such trade or business reduced by the cost or 
other basis of property which was purchased and sold in carrying 
on such trade or business, adjusted (after such reduction) in ac- 
cordance with the provisions of paragraphs (1) through (6) and 
paragraph (8) of this subsection; and 

(vi) in the case of any such trade or business in which the in- 
come is computed under an accrual method, the gross income 
from such trade or business, adjusted in accordance with the pro- 
visions of paragraphs (1) through (6) and paragraph (8) of this 
subsection ; 

and, for purposes of such sentence, if an individual (including a mem- 
ber of a partnership) derives gross income from more than one such 
trade or business, such gross income (including his distributive share 
of the gross income of any partnership derived from any such trade or 
business^) shall be deemed to have been derived from one trade or 
business. 

The preceding sentence and clauses (i) through (iv) of the second 
preceding sentence shall also apply in the case of any trade or business 
(other than a trade or business specified in such second preceding sen- 
tence) which is carried on by an individual who is self-employed on a 
regular basis as defined in subsection (g) , or by a partnership of which 
an individual is a member on a regular basis as defined in subsection 
(g) , but only if such individual's net earnings from self -employment 
in the taxable year as determined without regard to this sentence are 
less than $1,600 and less than 66% percent of the sum (in such taxable 
year) of such individual's gross income derived from all trades or 
businesses carried on by him and his distributive share of the income 
or loss from all trades or businesses carried on by all of the partnerships 
of which he is a member ; except that this sentence shall not apply to 
more than 5 taxable years in the case of any individual, and in no case 
in which an individual elects to determine the amount of his net earn- 
ings from self-employment for a taxable year under the provisions of 
the two preceding sentences with respect to a trade or business to which 
the second preceding sentence applies and with respect to a trade or 
business to which this sentence applies shall such net earnings for 
such year exceed $1,600. 

Self-Employment Income 

(b) The term "self -employment income" means the net earnings 
from self -employment derived by an individual (other than a non- 



115 



Sec. 211(c) 



resident alien individual) during any taxable year beginning after 
1950 ; except that such term shall not include — 

(1) That part of the net earnings from self-employment which 
is in excess of — 

(A) For any taxable year ending prior to 1955, (i) $3,600, 
minus (ii) the amount of the wages paid to such individual 
during the taxable year ; and 

(B) For any taxable year ending after 1954 and prior to 
1959, (i) $4,200, minus (ii) the amount of the wages paid to 
such individual during the taxable year ; and 

(C) For any taxable year ending after 1958 and prior to 
1966, (i) $4,800, minus (ii) the amount of the wages paid to 
such individual during the taxable year ; and 

(D) For any taxable year ending after 1965 and prior to 
1968, (i) $6,600, minus (ii) the amount of the wages paid 
to such individual during the taxable year ; and 

(E) For any taxable year ending after 1967 and beginning 
prior to 1972, (i) $7,800, minus (ii) the amount of the wages 
paid to such individual during the taxable year ; and 

(F) For any taxable year beginning after 1971 and prior 
to 1973, (i) $9,000, minus (ii) the amount of the wages paid 
to such individual during the taxable year ; and 

(G) For any taxable year beginning after 1972 and prior 
to 1974, (i) $10,800, minus (ii) the amount of the wages paid 
to such individual during the taxable year ; and 

(H) For any taxable year beginning after 1973 and prior 
to 1975, (i) $13,200, minus (ii) the amount of the wages paid 
to such individual during the taxable year ; and 

(I) For any taxable year beginning in any calendar year 
after 1974, (i) an amount equal to the contribution and bene- 
fit base (as determined under section 230 ) 1 which is effective 
for such calendar year, minus (ii) the amount of the wages 
paid to such individual during such taxable year; or 

(2) The net earnings from self -employment, if such net earn- 
ings for the taxable year are less than $400. 

An individual who is not a citizen of the United States but who is 
a resident of the Commonwealth of Puerto Rico, the Virgin Islands, 
Guam, or American Samoa shall not, for the purposes of this sub- 
section, be considered to be a nonresident alien individual. 

Trade or Business 

(c) The term "trade or business", when used with reference to self- 
employment income or net earnings from self -employment, shall have 



1 $14,100 for 1975 ; $15,300 for 1976. 



Sec. 211(c) 



116 



the same meaning as when used in section 162 of the Internal Revenue 
Code of 1954, except that such term shall not include— 

(1) The performance of the functions of a public office, other 
than the functions of a public office of a State or a political sub- 
division thereof with respect to fees received in any period in 
which the functions are performed in a position compensated 
solely on a fee basis and in which such functions are not covered 
under an agreement entered into by such State and the Secretary 
pursuant to section 218 ; 1 

(2) The performance of service by an individual as an em- 
ployee other than — 

(A) service described in section 210(a) (14) (B) performed 
by an individual who has attained the age of eighteen, 

(B) service described in section 210(a) (16), 

(C) service described in section 210(a) (11), (12), or (15) 
performed in the United States by a citizen of the United 
States, 

(D) service described in paragraph (4) of this subsection, 
and 

(E) service performed by an individual as an employee of 
a State or a political subdivision thereof in a position com- 
pensated solely on a fee basis with respect to fees received in 
any period in which such service is not covered under an 
agreement entered into by such State and the Secretary pur- 
suant to section 218 ; 

(3) The performance of service by an individual as an em- 
ployee or employee representative as defined in section 3231 of the 
Internal Revenue Code of 1954 ; 

(4) The performance of service by a duly ordained, commis- 
sioned, or licensed minister of a church in the exercise of his 
ministry or by a member of a religious order in the exercise of 
duties required by such order; 

(5) The performance of service by an individual in the exer- 
cise of his profession as a Christian Science practitioner; or 

(6) The performance of service by an individual during the 
period for which an exemption under section 1402(h) of the In- 
ternal Revenue Code of 1954 is effective with respect to him. 

The provisions of paragraph (4) or (5) shall not apply to service 
(other than service performed by a member of a religious order who 

!Sec. 122(c)(2) of the Social Security Amendments of 1967 provides: "Notwith- 
standing the provisions of subsections (a) and (b) of this section, any individual who 
in 1968 is in a position to which the amendments made by such subsections apply may 
make an irrevocable election not to have such amendments apply to the fees he receives 
in 1968 and every year thereafter, if on or before the due date of his income tax return 
for 1968 (including any extensions thereof) he files with the Secretary of the Treasury J 
or his delegate. In such manner as the Secretary of the Treasury or his delegate shall y 
by regulations prescribe, a certificate of election of exemption from such amendments." 



117 



Sec. 211(g) 



has taken a vow of poverty as a member of such order) performed 
by an individual unless an exemption under section 1402(e) of the 
Internal Revenue Code of 1954 is effective with respect to him. 

Partnership and Partner 

(d) The term "partnership'* and the term "partner" shall have the 
same meaning as when used in subchapter K of chapter 1 of the In- 
ternal Revenue Code of 1954. 

Taxable Year 

(e) The term "taxable year" shall have the same meaning as when 
used in subtitle A of the Internal Revenue Code of 1954; and the 
taxable year of any individual shall be a calendar year unless he has 
a different taxable year for the purposes of subtitle A of such Code, in 
which case his taxable year for the purposes of this title shall be the 
same as his taxable year under such subtitle A. 

Partner's Taxable Year Ending as Result of Death 

(f) In computing a partner's net earnings from self -employment 
for his taxable year which ends as a result of his death (but only if 
such taxable year ends within, and not with, the taxable year of the 
partnership) , there shall be included so much of the deceased partner's 
distributive share of the partnership's ordinary income or loss for the 
partnership taxable year as is not attributable to an interest in the 
partnership during any period beginning on or after the first day of 
the first calendar month following the month in which such partner 
died. For purposes of this subsection — 

(1) in determining the portion of the distributive share which 
is attributable to any period specified in the preceding sentence, 
the ordinary income or loss of the partnership shall be treated as 
having been realized or sustained ratably over the partnership 
taxable year ; and 

(2) the term "deceased partner's distributive share" includes 
the share of his estate or of any other person succeeding, by 
reason of his death, to rights with respect to his partnership 
interests. 

Regular Basis 

(g) An individual shall be deemed to be self-employed on a regular 
basis in a taxable year, or to be a member of a partnership on a regular 
basis in such year, if he had net earnings from self -employment, as 
defined in the first sentence of subsection (a), of not less than $400 in 
at least two of the three consecutive taxable years immediately pre- 
ceding such taxable year from trades or businesses carried on by such 
individual or such partnership. 



Sec. 212 



118 



Crediting of Self-Employment Income to Calendar Quarters 

Sec. 212. For the purposes of determining average monthly wage 
and quarters of coverage the amount of self -employment income de- 
rived during any taxable year shall be credited to calendar quarters 
as follows : 

(a) In the case of a taxable year which is a calendar year the self- 
employment income of such taxable year shall be credited equally to 
each quarter of such calendar year. 

(b) In the case of any other taxable year the self -employment in- 
come shall be credited equally to the calendar quarter in which such 
taxable year ends and to each of the next three or fewer preceding 
quarters any part of which is in such taxable year. 

Quarter and Quarter of Coverage 

Definitions 

Sec. 213. (a) For the purposes of this title — 

(1) The term "quarter", and the term "calendar quarter", 
means a period of three calendar months ending on March 31, 
June 30, September 30, or December 31. 

(2) The term "quarter of coverage" means a quarter in which 
the individual has been paid $50 or more in wages (except wages 
for agricultural labor paid after 1954) or for which he has been 
credited (as determined under section 212) with $100 or more of 
self -employment income, except that — 

(i) no quarter after the quarter in which such individual 
died shall be a quarter of coverage, and no quarter any part 
of which was included in a period of disability (other than 
the initial quarter and the last quarter of such period) shall 
be a quarter of coverage ; 

(ii) if the wages paid to any individual in any calendar 
year equal to $3,000 in the case of a calendar year before 1951, 
or $3,600 in the case of a calendar year after 1950 and before 
1955, or $4,200 in the case of a calendar year after 1954 and 
before 1959, or $4,800 in the case of a calendar year after 
1958 and before 1966, or $6,600 in the case of a calendar year 
after 1965 and before 1968, or $7,800 in the case of a calendar 
year after 1967 and before 1972, or $9,000 in the case of a 
calendar year after 1971 and before 1973, or $10,800 in the 
case of a calendar year after 1972 and before 1974, or $13,200 
in the case of a calendar year after 1973 and before 1975, or 
an amount equal to the contribution and benefit base (as de- 
termined under section 230) in the case of any calendar year 
after 1974 with respect to which such contribution and bene- 



119 



Sec. 213(a) 



fit base is effective, each quarter of such year shall (subject 
to clause (i) ) be a quarter of coverage ; 

(iii) if an individual has self -employment income for a 
taxable year, and if the sum of such income and the wages 
paid to him during such year equals $3,600 in the case of a 
taxable year beginning after 1950 and ending before 1955, 
or $4,200 in the case of a taxable year ending after 1954 and 
before 1959, or $4,800 in the case of a taxable year ending 
after 1958 and before 1966, or $6,600 in the case of a taxable 
year after 1965 and before 1968, or $7,800 in the case of a 
taxable year ending after 1967 and before 1972, or $9,000 in 
the case of a taxable year beginning after 1971 and before 
1973, or $10,800 in the case of a taxable year beginning after 
1972 and before 1974, or $13,200 in the case of a taxable year 
beginning after 1973 and before 1975, or an amount equal to 
the contribution and benefit base (as determined under section 
230) 1 which is effective for the calendar year in the case of any 
taxable year beginning in any calendar year after 1974, each 
quarter any part of which falls in such year shall (subject to 
clause (i) ) be a quarter of coverage; 

(iv) if an individual is paid wages for agricultural labor 
in a calendar year after 1954, then, subject to clause (i), (a) 
the last quarter of such year which can be but is not other- 
wise a quarter of coverage shall be a quarter of coverage if 
such wages equal or exceed $100 but are less than $200; (b) 
the last two quarters of such year which can be but are not 
otherwise quarters of coverage shall be quarters of coverage 
if such wages equal or exceed $200 but are less than $300; 
(c) the last three quarters of such year which can be but are 
not otherwise quarters of coverage shall be quarters of cover- 
age if such wages equal or exceed $300 but are less than $400 ; 
and (d) each quarter of such year which is not otherwise a 
quarter of coverage shall be a quarter of coverage if such 
wages are $400 or more ; and 

(v) no quarter shall be counted as a quarter of coverage 
prior to the beginning of such quarter. 

If in the case of any individual who has attained age 62 or died or 
is under a disability and who has been paid wages for agricultural 
labor in a calendar year after 1954, the requirements for insured status 
in subsection (a) or (b) of section 214, the requirements for entitle- 
ment to a computation or recomputation of his primary insurance 
amount, or the requirements of paragraph (3) of section 216 (i) are 
not met after assignment of quarters of coverage to quarters in such 
year as provided in clause (iv) of the preceding sentence, but would 



1 $14,100 for 1975 ; $15,300 for 1976. 



Sec. 213(b) 



120 



be met if such quarters of coverage were assigned to different quarters 
in such year, then such quarters of coverage shall instead be assigned, 
for purposes only of determining compliance with such requirements, 
to such different quarters. If, in the case of an individual who did not 
die prior to January 1, 1955, and who attained age 62 (if a woman) or 
age 65 (if a man) or died before July 1, 1957, the requirements for 
insured status in section 214(a) (3) 1 are not met because of his hav- 
ing too few quarters of coverage but would be met if his quarters of 
coverage in the first calendar year in which he had any covered em- 
ployment had been determined on the basis of the period during which 
wages were earned rather than on the basis of the period during which 
wages were paid (any such wages paid that are reallocated on an 
earned basis shall not be used in determining quarters of coverage for 
subsequent calendar years), then upon application filed by the indi- 
vidual or his survivors and satisfactory proof of his record of wages 
earned being furnished by such individual or his survivors, the quar- 
ters of coverage in such calendar year may be determined on the basis 
of the periods during which wages were earned. 

Crediting of Wages Paid in 1937 

(b) With respect to wages paid to an individual in the six-month 
periods commencing either January 1, 1937, or July 1, 1937; (A) if 
wages of not less than $100 were paid in any such period, one-half of 
the total amount thereof shall be deemed to have been paid in each of 
the calendar quarters in such period; and (B) if wages of less than 
$100 were paid in any such period, the total amount thereof shall be 
deemed to have been paid in the latter quarter of such period, except 
that if in any such period, the individual attained age sixty-five, all of 
the wages paid in such period shall be deemed to have been paid before 
such age was attained. 

Alternative Method for Determining Quarters of Coverage With Respect to 

Wages in the Period From 1937 to 1950 

( n c) For purposes of section 214(a), an individual shall be deemed 
to have one quarter of coverage for each $400 of his total wages prior 
to 1951 (as defined in section 215(d) (1) (C) ), except where — 

(1) such individual is not a fully insured individual on the 
basis of the number of quarters of coverage so derived plus the 
number of quarters of coverage derived from the wages and self- 
employment income credited to him for periods after 1950, or 



1 This reference is to sec. 214(a)(3) as in effect prior to repeal by the Social Security 
Amendments of 1960 (P.L. 86-778). See p. 835, vol. II. 



121 



Sec. 214(b) 



(2) such individual's elapsed years (for purposes of section 
214(a)(1)) are less than 7. 

Insured Status for Purposes of Old-Age and Survivors Insurance 

Benefits 

Sec. 214. For the purposes of this title — 

Fully Insured Individual 

(a) The term "fully insured individual" means any individual who 
had not less than — 

(1) one quarter of coverage (whenever acquired) for each 
calendar year elapsing after 1950 (or, if later, the year in which 
he attained age 21) and before the year in which he died or (if 
earlier) the year in which he attained age 62, except 1 that in 
no case shall an individual be a fully insured individual unless 
he has at least 6 quarters of coverage ; or 

(2) 40 quarters of coverage ; or 

(3) in the case of an individual who died before 1951, 6 quar- 
ters of coverage ; 

not counting as an elapsed year for purposes of paragraph (1) any 
year any part of which was included in a period of disability (as de- 
fined in section 216 (i) ) . 



Currently Insured Individual 

(b) The term "currently insured individual" means any individual 
who had not less than six quarters of coverage during the thirteen- 
quarter period ending with (1) the quarter in which he died, (2) the 
quarter in which he became entitled to old-age insurance benefits, (3) 
the quarter in which he became entitled to primary insurance benefits 
under this title as in effect prior to the enactment of this section, or 



iP.L. 92-603, section 104(a), deleted — 

"(A) in the case of a woman, the year in which she died or (if earlier) the year 
in which she attained age 62, 

(B) in the case of a man who has died, the year in which he died or (if earlier) 
the year in which he attained age 65, or 

(C) in the case of a man who has not died, the year in which he attained (or 
would attain) age 65, except", 

and inserted "the year in which he died or (if earlier) the year in which he attained 
age 62, except". Applicable in the case of a man who attains (or would attain) age 62 
after December 1974. 

In the case of a man who attains age 62 prior to 1975, the number of his elapsed 
years for purposes of section 215(b)(3) shall be equal to (A) the number determined 
under this section as in effect on September 1, 1972, or (B) if less, the number deter- 
mined as though he attained age 65 in 1975, except that monthly benefits under title II 
for months prior to January 1973 payable on the basis of his wae:es and self-employment 
income shall be determined as though section 104 of P.L. 92-603 had not been enacted. 

In the oase of a man who attains or W'll attain age 62 in 1973. the fie^re "65" in 
sections 214(a)(1), 223(c)(1)(A), and 216(i) (3) (A), shall be deemed to read "64". In 
the case of a man who attains or will attain age 62 in 1974, the figure "65" in sections 
214(a)(1), 223(c)(1)(A), and 216(i)(3)(A) shall be deemed to read "63". 



Sec. 215 



122 



(4) in the case of any individual entitled to disability insurance bene- 
fits, the quarter in which he most recently became entitled to disability 
insurance benefits, not counting as part of such thirteen-quarter period 
any quarter any part of which was included in a period of disability 
unless such quarter was a quarter of coverage. 

Computation of Primary Insurance Amount 
Sec. 215. For the purposes of this title — 

(a) The primary insurance amount of an insured individual shall 
be determined as follows : 

(1) Subject to the conditions specified in subsections (b), (c), 
and (d) of this section and except as provided in paragraphs (2) 
and (3) of this subsection, such primary insurance amount shall 
be whichever of the following amounts is the largest : 

(A) the amount in column IV of the following table (or, 
if larger, the amount in column IV of the latest table deemed 
to be such table under subsection (i)(2)(D)) on the line on 
which in column III of such table appears his average 
monthly wage (as determined under subsection (b) ) ; 
to be such table under subsection (i)(2)(D)) on the line on 
which in column II appears his primary insurance amount 
(as determined under subsection (c) ) ; or 

(C) the amount in column IV of such table on the line on 
which in column I appears his primary insurance benefit (as 
determined under subsection (d) ) . 

(2) In the case of an individual who was entitled to a disabil- 
ity insurance benefit for the month before the month in which 
he died, became entitled to old-age insurance benefits, or at- 
tained age 65, such primary insurance amount shall be — 

(A) the amount in column IV of such table which is equal 
to the primary insurance amount upon which such disability 
insurance benefit is based ; except that if such individual was 
entitled to a disability insurance benefit under section 223 
for the month before the effective month of a new table 
(whether enacted by another law or deemed to be such table 
under subsection (i)(2)(D)) and in the following month 
became entitled to an old-age insurance benefit, or he died in 
such following month, then his primary insurance amount for 
such following month shall be the amount in column IV of the 
new table on the line on which in column II of such table ap- 
pears his primary insurance amount for the month before 
the effective month of the table (as determined under subsec- 



123 



Sec. 215(a) 



tion (c) ) instead of the amount in column IV equal to the 
primary insurance amount on which his disability insurance 
benefit is based. For purposes of this paragraph, the term 
"primary insurance amount" with respect to any individual 
means only a primary insurance amount determined under 
paragraph (1) (and such individual's benefits shall be 
deemed to be based upon the primary insurance amount as 
so determined) ; or 

(B) an amount equal to the primary insurance amount 
upon which such disability insurance benefit is based if such 
primary insurance amount was determined under paragraph 
(3). 

(3) Such primary insurance amount shall be an amount equal to 
$9.00 multiplied by the individual's years of coverage in excess of 
10 in any case in which such amount is higher than the individ- 
ual's primary insurance amount as determined under paragraph 
(1) or (2). 

For purposes of paragraph (3) , an individual's "years of coverage" is 
the number (not exceeding 30) equal to the sum of (i) the number 
(not exceeding 14 and disregarding any fraction) determined by di- 
viding the total of the wages credited to him (including wages deemed 
to be paid prior to 1951 to such individual under section 217, compen- 
sation under the Railroad Retirement Act of 1937 prior to 1951 which 
is creditable to such individual pursuant to this title, and wages 
deemed to be paid prior to 1951 to such individual under section 231) 
for years after 1936 and before 1951 by $900, plus (ii) the number 
equal to the number of years after 1950 each of which is a computation 
base year (within the meaning of subsection (b)(2)(C)) and in each 
of which he is credited with wages (including wages deemed to be 
paid to such individual under section 217, compensation under the 
Railroad Retirement Act of 1937 which is creditable to such individual 
pursuant to this title, and wages deemed to be paid prior to 1951 to 
such individual under section 229) and self -employment income of 
not less than 25 percent of the maximum amount which, pursuant to 
subsection (e) , may be counted for such year. 



Sec. 215(a) 



124 



TABLE FOR DETERMINING PRIMARY INSURANCE AMOUNT AND MAXIMUM FAMILY BENEFITS 

BEGINNING JUNE 1975 ' 



I II III IV V 



(Primary 





insurance 










amount 




(Primary 


(Maximum 


(Primary insurance benefit 


effective for 




insurance 


family 


under 1939 Act, as modified) 


June 1974) 


(Average monthly wage) 


amount) 


benefits) 










And the 










maximum 










amount of 










benefits 










payable (as 




Or his 




The amount 


provided in 


If an individual's primary 


primary 




referred to 


sec. 203(a)) 


insurance benefit (as deter- 


insurance 


Or his average monthly wage (as 


in the 


on the basis 


mined under subsec. (d)) 


amount (as 


determined under subsec. (b)) 


preceding 


of his wages 


is— 


determined 


is — 


paragraphs 


and self- 




under 




of this 


employment 






But not 


subsec. (c)) 


But not 


subsection 


income 


At least — more than — 


is— 


At least— more than— 


shall be — 


shall be— 





$16.20 


$93. 80 




$76 


$101.40 


$152. 10 


$16.21 


16. 84 


95. 30 


$77 


78 


103. 00 


154. 50 


16.85 


17. 60 


97. 50 


79 


80 


105. 30 


158. 10 


17.61 


18. 40 


99. 30 


81 


81 


107. 30 


161.00 


18.41 


19. 24 


101.10 


82 


83 


109. 20 


163. 90 


19. 25 


20. 00 


103. 20 


84 


85 


111.50 


167. 30 


20.01 


20.64 


105. 10 


86 


87 


113.60 


170. 40 


20. 65 


21.28 


106. 80 


88 


89 


115. 40 


173. 10 


21.29 


21.88 


108. 90 


90 


90 


117.70 


176. 60 


21.89 


22. 28 


110. 80 


91 


92 


119.70 


179. 60 


22.29 


22.68 


112. 60 


93 


94 


121.70 


182. 60 


22.69 


23. 08 


114. 40 


95 


96 


123. 60 


185. 40 


23.09 


23.44 


116. 50 


97 


97 


125. 90 


188. 90 


23.45 


23.76 


118. 50 


98 


99 


128. 00 


192. 10 


23. 77 


24. 20 


120. 80 


100 


101 


130. 50 


195. 80 


24.21 


24. 60 


122. 50 


102 


102 


132. 30 


198. 60 


24.61 


25. 00 


124. 50 


103 


104 


134. 50 


201.80 


25.01 


25.48 


126. 80 


105 


106 


137. 00 


205. 50 


25. 49 


25.92 


128. 80 


107 


107 


139. 20 


208. 80 


25. 93 


26.40 


130. 90 


108 


109 


141.40 


212. 20 


26.41 


26. 94 


132.90 


110 


113 


143. 60 


215.40 


26.95 


27.46 


134. 80 


114 


118 


145. 60 


218.40 


27. 47 


28. 00 


136. 90 


119 


122 


147.90 


221.90 


28.01 


28. 68 


138. 90 


123 


127 


150. 10 


225. 20 


28. 69 


29. 25 


141. 10 


128 


132 


152.40 


228. 70 


29.26 


29.68 


143.00 


133 


136 


154. 50 


231.80 


29.69 


30. 36 


144. 90 


137 


141 


156. 50 


234. 80 


30.37 


30.92 


147. 10 


142 


146 


158. 90 


238. 40 


30.93 


31.36 


149. 10 


147 


150 


161.10 


241.70 


31.37 


32.00 


151.00 


151 


155 


163. 10 


244. 70 


32.01 


32.60 


153.20 


156 


160 


165. 50 


248. 30 


32.61 


33.20 


155. 10 


161 


164 


167. 60 


251.40 


33.21 


33.88 


157. 20 


165 


169 


169. 80 


254. 70 


33.89 


34. 50 


159. 20 


170 


174 


172.00 


258. 10 


34.51 


35. 00 


161.20 


175 


178 


174. 10 


261. 20 


35.01 


35. 80 


163.40 


179 


183 


176. 50 


264. 80 


35.81 


36.40 


165. 20 


184 


188 


178. 50 


267. 80 


36.41 


37.08 


167. 50 


189 


193 


180. 90 


271.60 


37.09 


37.60 


169. 50 


194 


197 


183.10 


274. 80 


37.61 


38. 20 


171.40 


198 


202 


185.20 


277. 80 


38.21 


39. 12 


173. 70 


203 


207 


187.60 


281.50 


39.13 


39. 68 


175.70 


208 


211 


189.80 


284.70 


39.69 


40.33 


177.40 


212 


216 


191.60 


287.40 


40.34 


41.12 


179.60 


217 


221 


194. 00 


291.00 


41. 13 


41.76 


181.60 


222 


225 


196. 20 


294. 30 


41.77 


42.44 


183. 80 


226 


230 


198.60 


297. 90 


42.45 


43.20 


185. 80 


231 


235 


200. 70 


301. 10 


43.21 


43.76 


188. 10 


236 


239 


203. 20 


304. 80 


43.77 


44.44 


189. 90 


240 


244 


205. 10 


309. 10 


44.45 


44. 88 


191.70 


245 


249 


207. 10 


315.50 


44.89 


45. 60 


194.10 


250 


253 


209. 70 


320. 60 






196. 10 


254 


258 


211.80 


326. 90 






197. 70 


259 


263 


213.60 


333. 10 






200. 10 


264 


267 


216.20 


338. 20 






202. 10 


268 


272 


218.30 


344.60 






204. 20 


273 


277 


220. 60 


350. 80 






206. 20 


278 


281 


222.70 


355.90 






208. 20 


282 


286 


224. 90 


362. 30 






210. 40 


287 


291 


227. 30 


368. 70 






212. 20 


292 


295 


229. 20 


373. 60 






214. 40 


296 


300 


231.60 


379. 90 






216. 40 


301 


305 


233. 80 


386. 30 



See footnote at end of table. 



125 



Sec. 215(a) 



TABLE FOR DETERMINING PRIMARY INSURANCE AMOUNT AND MAXIMUM FAMILY BENEFITS 

BEGINNING JUNE 1975 i— Continued 



II 



III 



IV 



(Primary insurance benefit 
under 1939 Act, as modified) 



If an individual's primary 
insurance benefit (as deter- 
mined under subsec. (d)) 
is— 



At least — 



But not 
more than — 



(Primary 
insurance 
amount 
effective for 
June 1974) 



Or his 
primary 
insurance 
amount (as 
determined 
under 
subsec. (c)) 
is— 



(Average monthly wage) 



Or his average monthly wage (as 
determined under subsec. (b)) 
is— 



At least- 



But not 
more than— 



(Primary 
insurance 
amount) 



The amount 
referred to 

in the 
preceding 
paragraphs 

of this 
subsection 
shall be — 



(Maximum 
family 
benefits) 

And the 
maximum 
amount of 
benefits 
payable (as 
provided in 
sec. 203(a)) 
on the basis 
of his wages 
and self- 
employment 
income 
shall be— 



coio on 
$£18. oU 


eonc 
$o0b 


TOAO. 

$5\jy 


fl'OOC on 
$£ob. 8U 


tool /in 
$091. 4U 


OOn Cn 

££0. bU 


o i n 
310 


Ol A 

ol4 


ooo on 
£08. £U 


OQT 70 

oy/. /U 


000 A(\ 

III. 4U 


1 c 
313 


1 O 

319 


o/in on 
Z4U. £U 


/in/i in 
4U4. 1U 


OO/I OA 

££4. oO 


oon 
3ZU 


ooo 
515 


o/io on 
£4£. oU 


/ino on 
4U3. £U 


ooc cn 
lib. oil 


OO/l 
0£4 


5lo 


OA A Tn 

£44. /0 


/lie cn 


000 tA 

Ho. bO 


ooo 
0£3 


ooo 
555 


o/ic on 
£4b. 8U 


/ioi cn 
4£1. BU 


oon on 
£oU. 80 


OO/I 

oo4 


OOT 

33/ 


o/io on 
£49. oU 


/ioc on 
4£b. yu 


ooo cn 
161. bO 


ooo 
008 


OA 

o4Z 


oci i n 
£bl. 1U 


/ioo i n 

400. 1U 


oo/i cn 
£o4. bU 


O/IO 

o4o 


OA~J 

5M 


oco on 
£bo. oU 


/ioq cn 


ooc on 
£00. sU 


O/IO 

o48 


OC1 

351 


occ on 
£bb. 8U 


aaa cn 

111, DU 


ooo 7n 
loo. /U 


oco 
Sol 


occ 

obb 


oct on 
£b/. oU 


a cn on 
4DU. BU 


O/in on 

£4U. yu 


OCT 

ob/ 


OC 1 

3b 1 


ocn on 
£bU. £0 


/ic7 on 
4b/. £U 


O/io on 
£4£. 80 


oco 
Sol 


occ 
ODD 


oco on 
£b£. oU 


/1C9 on 
hO£. OU 


o/i/i in 
£44. /O 


occ 
Job 


ot a 
o/U 


oca on 
£b4. oU 


/ico cn 

408. OU 


o<c on 
£4b. yu 


OT1 
0/1 


0"7C 

5/b 


occ on 
£bb. /U 


A1A on 
4/4. BU 


o/io on 

£48. yu 


OTC 

o/b 




oco on 

£be. yu 


a on in 
4BU. 1U 


oci i n 
£bl. 1U 


oon 
OBU 


00 A 

oo4 


oti on 
£71. ZU 


/loc a n 
48b. 4U 


oco on 

i5i. yu 


ooc 

oeb 


icy 


oto on 
IIS. £U 


AQO cn 

4y£. bU 


oc/i on 
Zb4. yu 


oon 

oyu 


ooo 


otc on 
£/b. oU 


/I07 7n 

4y/. /u 


oct 1 n 
101. 1U 


OO/I 

oy4 


ooo 


OTT Tn 

£//. /U 


cn/i i n 
bU4. 1U 


oco nn 

/by. UU 


ooo 

oyy 


A AO 

40o 


oto on 

£/y. BU 


cm cn 
blU. DO 


oc i on 
£bl. oU 


4U4 


40/ 


ooo on 
£S£. oU 


C1 C Af\ 

bib. 40 


oco nn 

£bo. 00 


a no 

408 


412 


oo/i i n 
£64. 10 


coi on 
b£l. 80 


oc a nn 
£b4. 90 


A 1 O 

413 


JIT 

417 


ooc i n 
£8b. 10 


coo i n 

b£e. 10 


Occ on 
£00. 80 


At Q 

418 


421 


ooo on 
£00. £0 


coo in 

boo. 10 


O^O AA 

/oo. 90 


ill 

422 


426 


A A A C A 

290. 50 


COO /In 

boy. 40 


270. 70 


427 


431 


Of\1 A A 

292. 40 


HAG. on 

b4b. 80 


Oil J A 

272. 40 


A OA 

432 


436 


A A A OA 

294. 20 


ceo in 
DD£. 10 


07/1 7n 
£74. /U 


/IOT 

40/ 


440 


ooc Tn 

zyb. /U 


cc/i cn 
Db4. bU 


276. 30 


441 


445 


298. 50 


557. 90 


278. 20 


446 


450 


300. 50 


561.00 


280. 30 


451 


454 


302. 80 


563. 50 


282. 10 


455 


459 


304. 70 


566. 60 


284.00 


460 


464 


306. 80 


569. 70 


285. 80 


465 


468 


308. 70 


572. 40 


288. 00 


469 


473 


311.10 


575. 50 


289. 60 


474 


478 


312.80 


578. 70 


291.50 


479 


482 


314. 90 


581.30 


293. 60 


483 


487 


317. 10 


584.50 


295. 40 


488 


492 


319.10 


587. 70 


297. 30 


493 


496 


321.10 


590. 20 


299. 40 


497 


501 


323. 40 


593. 30 


301. 10 


502 


506 


325.20 


596. 40 


303. 00 


507 


510 


327. 30 


599. 00 


304. 90 


511 


515 


329. 30 


602. 10 


306. 90 


516 


520 


331.50 


605. 40 


308. 70 


521 


524 


333. 40 


607. 80 


310.60 


525 


529 


335. 50 


611.00 


312.70 


530 


534 


337. 80 


614. 10 


314. 40 


535 


538 


339. 60 


616.70 


316. 30 


539 


543 


341.70 


619. 90 


318.40 


544 


548 


343. 90 


623.00 


320. 20 


549 


553 


345. 90 


626. 20 


322. 10 


554 


556 


347. 90 


628. 10 


323. 60 


557 


560 


349. 50 


630. 70 


325.40 


561 


563 


351.50 


632.60 


327. 10 


564 


567 


353.30 


635. 10 


328. 80 


568 


570 


355. 20 


637. 00 


330. 40 


571 


574 


356. 90 


639. 40 


332.20 


575 


577 


358. 80 


641. 50 


333. 70 


578 


581 


360. 40 


643. 80 


335. 50 


582 


584 


362. 40 


645. 80 



See footnote at end of table. 



Sec. 215(a) 



126 



TABLE FOR DETERMINING PRIMARY INSURANCE AMOUNT AND MAXIMUM FAMILY BENEFITS 

BEGINNING JUNE 1975 '—Continued 



II 



IV 



(Primary insurance benefit 
under 1939 Act, as modified) 



If an individual's primary 
insurance benefit (as deter- 
mined under subsec. (d)) 
is— 



At least — 



But not 
more than— 



(Primary 
insurance 
amount 
effective for 
June 1974) 



Or his 
primary 
insurance 
amount (as 
determined 
under 
subsec. (c)) 
is— 



(Average monthly wage) 



Or his average monthly wage (as 
determined under subsec. (b)) 
is— 



At least — 



But not 
more than— 



(Primary 
insurance 
amount) 



The amount 
referred to 
in the 
preceding 
paragraphs 
of this 
subsection 
shall be— 



(Maximum 
family 
benefits) 

And the 
maximum 
amount of 
benefits 
payable (as 
provided in 
sec. 203(a); 
on the basis 
of his wages 
and self- 
employment 
income 
shall be— 



$337. 00 


$585 


$588 


$364.00 


$648. 40 


338.90 


589 


591 


366. 10 


650. 20 


340. 60 


592 


595 


367.90 


652. 80 


342. 30 


596 


598 


369. 70 


654. 60 


343.90 


599 


602 


371. 50 


657. 30 


345. 60 


603 


605 


373. 30 


659. 20 


347. 30 


606 


609 


375. 10 


661. 50 


349. 00 


610 


612 


377.00 


663. 60 


350. 70 


613 


616 


378. 80 


666. 10 


352. 40 


617 


620 


380. 60 


668. 70 


354. 00 


621 


623 


382. 40 


670. 50 


355.70 


624 


627 


384. 20 


673. 10 


357. 40 


628 


630 


386. 00 


675. 40 


359.00 


631 


634 


387. 80 


678. 70 


360. 80 


635 


637 


398. 70 


681.90 


362. 60 


638 


641 


391. 70 


685. 20 


364. 10 


642 


644 


393. 30 


688. 20 


365.90 


645 


648 


395. 20 


691. 60 


367. 50 


649 


652 


396.90 


694. 60 


368. 60 


653 


656 


398. 10 


696. 60 


369. 60 


657 


660 


399. 20 


698. 50 


370.90 


661 


665 


400. 60 


701. 10 


372. 20 


666 


670 


402. 00 


703. 60 


373. 60 


671 


675 


403. 50 


706.00 


374.90 


676 


680 


404.90 


708. 60 


376.20 


681 


685 


406.30 


711.10 


377. 60 


686 


690 


407.90 


713. 60 


378.90 


691 


695 


409. 30 


716. 20 


380. 20 


696 


700 


410. 70 


718. 70 


381.60 


701 


705 


412. 20 


721. 20 


382.90 


706 


710 


413. 60 


723. 60 


384. 20 


711 


715 


415.00 


726. 20 


385. 60 


716 


720 


416. 50 


728. 70 


386.90 


721 


725 


417.90 


731. 20 


388. 20 


726 


730 


419. 30 


733. 80 


389. 50 


731 


735 


420. 70 


736. 30 


390.90 


736 


740 


422. 20 


738.80 


392. 20 


741 


745 


423.60 


741. 40 


393. 50 


746 


750 


425.00 


743. 80 


394. 70 


751 


755 


426. 30 


746.00 


395. 80 


756 


760 


427. 50 


748. 10 


396.90 


761 


765 


428. 70 


750. 20 


398. 00 


766 


770 


429. 90 


752. 30 


399. 10 


771 


775 


431.10 


754. 40 


400.20 


776 


780 


432. 30 


756. 40 


401. 30 


781 


785 


433. 50 


758. 50 


402.40 


786 


790 


434.60 


760.60 


403. 50 


791 


795 


435.80 


762. 70 


404. 60 


796 


800 


437.00 


764.80 


405. 80 


801 


805 


438. 30 


767.00 


406. 90 


806 


810 


439. 50 


769. 00 


408. 00 


811 


815 


440. 70 


771.20 


409. 10 


816 


820 


441.90 


773. 20 


410. 20 


821 


825 


443.10 


775. 40 


411.30 


826 


830 


444.30 


777.40 


412.40 


831 


835 


445.40 


779. 60 


413. 50 


836 


840 


446. 60 


781. 60 


414.60 


841 


845 


447. 80 


783. 80 


415. 70 


846 


850 


449. 00 


785. 70 


416. 90 


851 


855 


450. 30 


787.90 


418. 00 


856 


860 


451. 50 


790.00 


419. 10 


861 


865 


452. 70 


792. 10 



See footnote at end of table. 



127 



Sec. 215(a) 



TABLE FOR DETERMINING PRIMARY INSURANCE AMOUNT AND MAXIMUM FAMILY BENEFITS 

BEGINNING JUNE 1975 i— Continued 



II 



III 



IV 



(Primary insurance benefit 
under 1939 Act, as modified) 



(Primary 
insurance 
amount 
effective for 
June 1974) 



(Average monthly wage) 



(Primary 
insurance 
amount) 



If an individual's primary 
insurance benefit (as deter- 
mined under subsec. (d)) 
is— 



At least- 



But not 
more than — 



Or his 
primary 
insurance 
amount (as 
determined 
under 
subsec. (c)) 
is — 



Or his average monthly wage (as 
determined under subsec. (b)) 
is— 



At least— 



But not 
more than — 



The amount 
referred to 
in the 
preceding 
paragraphs 
of this 
subsection 
shall be — 



(Maximum 
family 
benefits) 

And the 
maximum 
amount of 
benefits 
payable (as 
provided in 
sec. 203(a)) 
on the basis 
of his wages 
and self- 
employment 
income 
shall be— 



TAon on 
$4ZU. iu 




tQ7n 


fACO on 
}40o. yu 


*OOA on 


aoi on 

4tl. OU 


B.71 

on 


Q7C 
0/3 


acc i n 
400. 1U 


70c on 
/so. OU 


A09 An 
ML. 4U 


07C 
O/D 


oon 

OOU 


a cc on 
400. l\) 


700 An 
/38. 4U 


A90 cn 
4t0. DU 


901 


OQC 
000 


AC7 An 
40/. 4U 


onn cn 
8UU. OU 


A 1 ) a cn 

hl 1 *. ou 


OQC 
OOD 


oon 

09U 


acq cn 
400. DU 


ono cn 
8UZ. OU 


A9C 7n 
4£0. /u 


Ml 
031 


OQC 
030 


acq on 
403. OU 


onA on 
8U4. 8U 


joc on 

4t0. OU 


OQC 
030 


onn 

3UU 


aci nn 
401. UU 


one on 
OUD. OU 


aoo nn 

HCo. UU 


QA1 
all I 


one 

3U0 


aco on 
4o<:. oU 


ono nn 

ouy. uu 


aoq i n 
Its. 1U 


one 

3U0 


qi n 

3lU 


aco cn 
400. OU 


oil nn 
oil. UU 


Aon on 
40U. i\j 


Q1 1 
all 


01 c 

3lO 


ACA 7n 
404. /U 


qio on 
81o. ZU 


aw on 

401. oU 


Q1 C 
310 


Q7n 

MAI 


acc on 
400. yu 


qic in 
810. 1U 


AOO An 

40t. 4U 


Q91 


QOC 
3£0 


AC7 nn 
40/. UU 


Q 1 7 on 
81/. oU 


aii cn 

400. OU 


QOC 


oon 

30U 


acq on 
400. i\J 


o 1 Q on 
013. OU 


AOA cn 


QOI 
301 


QOC 
300 


ACQ An 
40y. 4U 


qo i cn 
oil. OU 


aoc on 

400, /U 


QOC 
300 


QAn 

34U 


A7n cn 
4/U. bU 


QOO cn 
8Zo. OU 


aoc cn 

430. OU 


QA1 
341 


QAC 
340 


A71 on 
4/1. OU 


ooc 7n 

OiO. /U 


A07 on 
43/. 3U 


QAC 
340 


ocn 
sou 


A7o nn 
4/0. UU 


Q07 on 
oil . 80 


AOQ i n 
403. 1U 


QC1 
301 


QCC 
300 


A7A on 
4/4. oU 


qoo on 

oiv. yu 


a An on 

44U. l\) 


QCC 
300 


ocn 
sou 


A7C cn 
4/0. OU 


qoo nn 
oii. UU 


aai on 
441. OU 


QC1 
301 


QCC 
300 


A7C 7n 
4/0. /U 


qoa in 
8o4. 1U 


AAO An 
44t. 4U 


QCC 
300 


Q7n 

37U 


A77 on 
4//. OU 


qoc on 
Bob. iv 


aao cn 
443. OU 


071 

37 1 


Q7C 
3/0 


A7Q nn 

4/y. uu 


qoq on 
ooo. oU 


AAA cn 
444. DU 


Q7C 
3/0 


oon 

30U 


a on on 
48U. ZU 


o^n on 
84U. oU 


AAC 7n 
440. /U 


QQ1 
301 


QOC 
300 


ioi An 
481. 4U 


QA o An 
84£. 4U 


aac on 
440. OU 


QOC 
300 


oon 

33U 


aqo cn 
4oZ. oU 


OAA cn 
844. 0U 


A A 7 on 
44/. SU 


QQ1 
9S1 


QQC 
330 


AQO on 

4oo. oU 


o AC on 
84b. /U 


viao nn 
445J. UU 


OQC 
330 


i nnn 
1, UUU 


aoc nn 
480. UU 


OAO 7n 

848. /U 


a cn nn 
40U. UU 


i nm 
1, UU1 


i nnc 
1, UUO 


aoc nn 
480. UU 


ocn cn 
80U. OU 


451 00 


1 006 


1 010 


487 10 


852 50 


452*. 00 


l' r Oil 


1, 015 


4881 20 


854.' 30 


453. 00 


1,016 


1,020 


489. 30 


856. 30 


454. 00 


1,021 


1,025 


490. 40 


858. 10 


455. 00 


1,026 


1,030 


491. 40 


860. 10 


456. 00 


1,031 


1,035 


492. 50 


861.90 


457. 00 


1,036 


1,040 


493. 60 


863.80 


458. 00 


1,041 


1,045 


494. 70 


865. 70 


459. 00 


1,046 


1,050 


495. 80 


867. 60 


460. 00 


1, 051 


1,055 


496. 80 


869. 40 


461.00 


1,056 


1, 060 


497. 90 


871.40 


462. 00 


1,061 


1,065 


499. 00 


873. 20 


463. 00 


1,066 


1,070 


500. 10 


875.20 


464. 00 


1,071 


1,075 


501.20 


877. 00 


465. 00 


1,076 


1,080 


502. 20 


879. 00 


466. 00 


1,081 


1,085 


503. 30 


880. 80 


467. 00 


1,086 


1,090 


504. 40 


882. 70 


468. 00 


1,091 


1,095 


505. 50 


884. 60 


469. 00 


1,096 


1,100 


506. 60 


886. 50 


470. 00 


1, 101 


1,105 


507. 60 


888.30 


471.00 


1,106 


1,110 


508. 70 


890. 30 


472.00 


1,111 


1, 115 


509. 80 


892. 10 


473. 00 


1,116 


1,120 


510. 90 


894. 10 


474. 00 


1, 121 


1,125 


512.00 


895. 90 


475. 00 


1,126 


1,130 


513. 00 


897. 90 


476. 00 


1,131 


1, 135 


514. 10 


899. 70 


477.00 


1, 136 


1,140 


515.20 


901.60 


478. 00 


1,141 


1,145 


516. 30 


903. 50 


479. 00 


1, 146 


1,150 


517. 40 


905.40 


480. 00 


1,151 


1,155 


518. 40 


907. 20 


481.00 


1,156 


1,160 


519. 50 


909. 20 


482. 00 


1,161 


1,165 


520. 60 


911.00 


483.00 


1,166 


1,170 


521.70 


913. 00 


484. 00 


1,171 


1,175 


522. 80 


914. 80 



See footnotes at end of table. 



Sec. 215(a) 



128 



TABLE FOR DETERMINING PRIMARY INSURANCE AMOUNT AND MAXIMUM FAMILY BENEFITS 

BEGINNING JUNE 1975 '—Continued 



l 



(Primary insurance benefit 
under 1939 Act, as modified) 



If an individual's primary 
insurance benefit (as deter- 
mined under subsec. (d)) 
is— 



At least- 



But not 
more than— 



II 

(Primary 
insurance 
amount 
effective for 
June 1974) 



Or his 
primary 
insurance 
amount (as 
determined 
under 
subsec. (c)) 
is— 



III 



(Average monthly wage) 



Or his average monthly wage (as 
determined under subsec. (b)) 
is— 



At least— 



But not 
more than— 



IV 



(Primary 
insurance 
amount) 



The amount 
referred to 
in the 
preceding 
paragraphs 
of this 
subsection 
shall be— 



(Maximum 
family 
benefits) 

And the 
maximum 
amount of 
benefits 
payable (as 
provided in 
sec. 203(a)) 
on the basis 
of his wages 
and self- 
employment 
income 
shall be— 



» $1176 


$1180 


$523. 80 


$916. 70 


1181 


1185 


524. 80 


918. 40 


1186 


1190 


525. 80 


920. 20 


1191 


1195 


526. 80 


921. 90 


1196 


1200 


527. 80 


923. 70 


1201 


1205 


528. 80 


925. 40 


1206 


1210 


529. 80 


927. 20 


1211 


1215 


530. 80 


928. 90 


1216 


1220 


531. 80 


930. 70 


1221 


1225 


532. 80 


932. 40 


1226 


1230 


533. 80 


934. 20 


1231 


1235 


534. 80 


935. 90 


1236 


1240 


535. 80 


937. 70 


1241 


1245 


536. 80 


939. 40 


1246 


1250 


537. 80 


941. 20 


1251 


1255 


538. 80 


942. 90 


1256 


1260 


539. 80 


944. 70 


1261 


1265 


540. 80 


946. 40 


1266 


1270 


541.80 


948. 20 


1271 


1275 


542. 80 


949. 90 



> Under sec. 215(i)(2XD), this table which was promulgated on May 22, 1975 (40 F.R. 22291-22296) is deemed to appear 
in the law at this point. 

2 So much of this table as applies to average monthly wages of $1176 to $1275 was promulgated October 30, 1975 (40 
F.R. 50556-50557) and is effective January 1976. 

Average Monthly Wage 

(b) (1) For the purposes of column III of the table appearing in 
subsection (a) of this section, an individual's "average monthly wage" 
shall be the quotient obtained by dividing — 

(A) the total of his wages paid in and self -employment income 
credited to his "benefit computation years" (determined under 
paragraph (2) ), by 

( B ) the number of months in such years. 

(2) (A) The number of an individual's "benefit computation years" 
shall be equal to the number of elapsed years (determined under para- 
graph (3) of this subsection), reduced by five, except that the number 
of an individual's benefit computation years shall in no case be less 
than two. 

(B) An individual's "benefit computation years" shall be those com- 
putation base years, equal in number to the number determined under 
subparagraph (A), for which the total of his wages and self -employ- 
ment income is the largest. 



129 



Sec. 215(c) 



(C) For purposes of subparagraph (B), "computation base years" 
include only calendar years in the period after 1950 and prior to the 
earlier of the following years — 

(i) the year in which occurred (whether by reason of section 
202 (j) (1) or otherwise) the first month for which the individual 
was entitled to old-age insurance benefits, or 

(ii) the year succeeding the year in which he died. 

Any calendar year all of which is included in a period of disability 
shall not be included as a computation base year. 

(3) For purposes of paragraph (2), the number of an individual's 
elapsed years is the number of calendar years after 1950 (or, if later, 
the year in which he attained age 21) and before the year in which 
he died, or if it occurred earlier but after 1960, the year in which he 
attained age 62. 1 For purposes of the preceding sentence, any cal- 
endar year any part of which was included in a period of disability 
shall not be included in such number of calendar years. 

(4) The provisions of this subsection shall be applicable onty in the 
case of an individual — 

(A) who becomes entitled to benefits under section 202(a) or 
section 223 in or after the month in which a new table that appears 
in (or is deemed by subsection (i) (2) (D) to appear in) section 
tion (a) becomes effective; or 

(B) who dies in or after the month in which such table be- 
comes effective without being entitled to benefits under section 
202 (a) or section 223 ; or 

(C) whose primary insurance amount is required to be recom- 
puted under subsection (f ) (2) 

(5) [Eepealed.] 

Primary Insurance Amount Under Prior Provisions 

(c) (1) For the purpose of column II of the latest table that appears 
in (or is deemed to appear in) subsection (a) of this section, an in- 
dividual's primary insurance amount shall be computed on the basis 
of the law in effect prior to the month in which the latest such table 
became effective. 

(2) The provisions of this subsection shall be applicable only in the 
case of an individual who became entitled to benefits under section 
202(a) or section 223, or who died, before such effective month. 

1 P.L. 92-603. section 104(b), deleted "before — 

(A) In the case of a woman, the year in which she died or, if it occurred earner 
but after 1960, the year in which she attained age 62. 

(B) in the case of a man who has died, the year in which he died or, if it occurred 
earlier but after 1960, the year in which he attained age 65, or 

(C) in the case of a man who has not died, the year occurring after 1960 in which 
he attained (or would attain) age 65. 

For" and inserted "before the year in which he died, or if it occurred earlier but after 
1960. the year in which he attained age 62. For". 
See footnote to sec. 214(a) (1) for effective date. 



Sec. 215(d) 



130 



Primary Insurance Benefit Under 1939 Act 

(d) (1) For purposes of column I of the table appearing in subsec- 
tion (a) of this section, an individual's primary insurance benefit shall 
be computed as follows : 

(A) The individual's average monthly wage shall be determined 
as provided in subsection (b) (but without regard to paragraph 
(4) thereof) of this section, except that for purposes of paragraph 
(2) (C) and (3) of such subsection, 1936 shall be used instead of 
1950. 

(B) For purposes of subparagraphs (B) and (C) of subsection 
(b) (2), an individual whose total wages prior to 1951 (as defined 
in subparagraph (C) of this subsection) — 

(i) do not exceed $27,000 shall be deemed to have been paid 
such wages in equal parts in nine calendar years after 1936 
and prior to 1951 ; 

(ii) exceed $27,000 and are less than $42,000 shall be deemed 
to have been paid (I) $3,000 in each of such number of calen- 
dar years after 1936 and prior to 1951 as is equal to the integer 
derived by dividing such total wages by $3,000, and (II) the 
excess of such total wages over the product of $3,000 times 
such integer, in an additional calendar year in such period ; or 

(iii) are at least $42,000 shall be deemed to have been paid 
$3,000 in each of the fourteen calendar years after 1936 and 
prior to 1951. 

(C) For the purposes of subparagraph (B), "total wages prior 
to 1951" with respect to an individual means the sum of (i) re- 
muneration credited to such individual prior to 1951 on the records 
of the Secretary, (ii) wages deemed paid prior to 1951 to such 
individual under section 217, (iii) compensation under the Rail- 
road Retirement Act of 1937 prior to 1951 creditable to him pur- 
suant to this title, and (iv) wages deemed paid prior to 1951 to 
such individual under section 231. 

(D) The individual's primary insurance benefits shall be 45.6 
per centum of the first $50 of his average monthly wage as com- 
puted under this subsection, plus 11.4 per centum of the next $200 
of such average monthly wage. 

(2) The provisions of this subsection shall be applicable only in the 
case of an individual — 

(A) with respect to whom at least one of the quarters elapsing 
prior to 1951 is a quarter of coverage ; 

(B) except as provided in paragraph (3), who attained age 
22 after 1950 and with respect to whom less than six of the quar- 
ters elapsing after 1950 are quarters of coverage, or who attained 
such age before 1951 ; and 



131 



Sec. 215(f) 



(C) (i) who becomes entitled to benefits under section 202(a) 
or 223 after the date of the enactment of the Social Security 
Amendments of 1967, or 

(ii) who dies after such date without being entitled to benefits 
under section 202 (a) or 223, or 

(iii) whose primary insurance amount is required to be recom- 
puted under section 215(f) (2) or (6), or section 231. 

(3) The provisions of this subsection as in effect prior to the enact- 
ment of the Social Security Amendments of 1967 shall be applicable 
in the case of an individual — 

(A) who attained age 21 after 1936 and prior to 1951, or 

(B) who had a period of disability which began prior to 1951, 
but only if the primary insurance amount resulting therefrom is 
higher than the primary insurance amount resulting from the ap- 
plication of this section (as amended by the Social Security 
Amendments of 1967) and section 220. 

Certain Wages and Self-Employment Income Not To Be Counted 

(e) For the purposes of subsections (b) and (d) — 

(1) in computing an individual's average monthly wage there 
shall not be counted the excess over $3,600 in the case of any 
calendar year after 1950 and before 1955, the excess over $4,200 
in the case of any calendar year after 1954 and before 1959, the 
excess over $4,800 in the case of any calendar year after 1958 
and before 1966, the excess over $6,600 in the case of any calendar 
year after 1965 and before 1968, the excess over $7,800 in the case 
of any calendar year after 1967 and before 1972, the excess over 
$9,000 in the case of any calendar year after 1971 and before 1973, 
the excess over $10,800 in the case of any calendar year after 1972 
and before 1974, the excess over $13,200 in the case of any calendar 
year after 1973 and before 1975, and the excess over an amount 
equal to the contribution and benefit base (as determined under 
section 230) 1 in the case of any calendar year after 1974 with re- 
spect to which such contribution and benefit base is effective of 
(A) the wages paid to him in such year, plus (B) the self -employ- 
ment income credited to such year (as determined under section 
212) ; and 

(2) if an individual's average monthly wage computed under 
subsection (b) or for the purposes of subsection (d) is not a multi- 
ple of $1, it shall be reduced to the next lower multiple of $1. 

Recomputation of Benefits 

(f) (1) After an individual's primary insurance amount has been 
determined under this section, there shall be no recomputation of such 



1 $14,100 for 1975 ; $15,300 for 1976. 



Sec. 215(f) 



132 



individual's primary insurance amount except as provided in this sub- 
section or, in the case of a World War II veteran who died prior to 
July 27, 1954, as provided in section 217 (b) . 

( 2 ) If an ind i vidual has wages or self -employ ment income for a year 
after 1965 for any part of which he is entitled to old-age insurance 
benefits, the Secretary shall, at such time or times and within such 
period as he may by regulations prescribe, recompute such individual's 
primary insurance amount with respect to each year. Such recom- 
putation shall be made as provided in subsections (a)(1)(A) and 
(C) and (a) (3), as though the year with respect to which such re- 
computation is made is the last year of the period specified in subsec- 
tion (b)(2)(C). A recomputation under this paragraph with respect 
to any year shall be effective — 

(A) in the case of an individual who did not die in such year, 
for monthly benefits beginning with benefits for January of the 
following year ; or 

(B) in the case of an individual who died in such year, for 
monthly benefits beginning with benefits for the month in which 
he died. 

(3) In the case of any individual who became entitled to old-age 
insurance benefits in 1952 or in a taxable year which began in 1952 
(and without the application of section 202(j)(l)), or who died in 
1952 or in a taxable year which began in 1952 but did not become 
entitled to such benefits prior to 1952, and who had self-employment 
income for a taxable year which ended within or with 1952 or which 
began in 1952, then upon application filed by such individual after the 
close of such taxable year and prior to January 1961 or (if he died 
without filing such application and such death occurred prior to J anu- 
ary 1961) by a person entitled to monthly benefits on the bases of such 
individual's wages and self-employment income, the Secretary shall 
recompute such individual's primary insurance amount. Such recom- 
putation shall be made in the manner provided in the preceding sub- 
sections of this section (other than subsection (b)(4)(A)) for com- 
putation of such amount, except that (A) the self -employ ment income 
closing date shall be the day following the quarter with or within 
which such taxable year ended, and (B) the self -employment income 
for any subsequent taxable year shall not be taken into account. Such 
recomputation shall be effective (A) in the case of an application filed 
by such individual, for and after the first month in which he became 
entitled to old-age insurance benefits, and (B) in the case of an appli- 
cation filed by any other person, for and after the month in which such 
person who filed such application for recomputation became entitled 
to such monthly benefits. No recomputation under this paragraph pur- 
suant to an application filed after such individual's death shall affect 
the amount of the lump-sum death payment under subsection (i) of 



133 



Sec. 215(g) 



section 202, and no such recomputation shall render erroneous any 
such payment certified by the Secretary prior to the effective date of 
the recomputation. 

(4) Any recomputation under this subsection shall be effective only 
if such recomputation results in a higher primary insurance amount. 

(5) In the case of a man who became entitled to old-age insurance 
benefits and died before the month in which he attained age 65, the 
Secretary shall recompute his primary insurance amount as provided 
in subsection (a) as though he became entitled to old-age insurance 
benefits in the month in which he died; except that (i) his computa- 
tion base years referred to in subsection (b) (2) shall include the year 
in which he died, and (ii) his elapsed years referred to in subsection 
(b) (3) shall not include the year in which he died or any year there- 
after. Such recomputation of such primary insurance amount shall be 
effective for and after the month in which he died. 

(6) Upon the death after 1967 of an individual entitled to benefits 
under section 202(a) or section 223, if any person is entitled to 
monthly benefits or a lump-sum death payment, on the wages and self- 
employment income of such individual, the Secretary shall recompute 
the decedent's primary insurance amount, but only if the decedent 
during his lifetime was paid compensation which was treated under 
section 205 (o) as remuneration for employment. 

Rounding of Benefits 

(g) The amount of any primary insurance amount and the amount 
of any monthly benefit computed under section 202 or 223 which (after 
reduction under section 203(a) and deductions under section 203(b) ) 
is not a multiple of $0.10 shall be raised to the next higher multiple 
of $0.10. 

(h) (1) Notwithstanding the provisions of subchapter III of chap- 
ter 83 of title 5, United States Code, remuneration paid for services to 
which the provisions of section 210(1) (1) of this Act are applicable 
and which is performed by an individual as a commissioned officer of 
the Reserve Corps of the Public Health Service prior to July 1, 1960, 
shall not be included in computing entitlement to or the amount of any 
monthly benefit under this title, on the basis of his wages and self- 
employment income, for any month after June 1960 and prior to the 
first month with respect to which the Civil Service Commission certi- 
fies to the Secretary that, by reason of a waiver filed as provided in 
paragraph (2), no further annuity will be paid to him, his wife, and 
his children, or, if he has died, to his widow and children, under sub- 
chapter III of chapter 83 of title 5, United States Code, on the basis 
of such service. 

(2) In the case of a monthly benefit for a month prior to that in 
which the individual, on whose wages and self-employment income 
such benefit is based, dies, the waiver must be filed by such individual ; 



Sec.215(i) 



134 



and such waiver shall be irrevocable and shall constitute a waiver on 
behalf of himself, his wife, and his children. If such individual did not 
file such a waiver before he died, then in the case of a benefit for the 
month in which he died or any month thereafter, such waiver must be 
filed by his widow, if any, and by or on behalf of all his children, if 
any; and such waivers shall be irrevocable. Such a waiver by a child 
shall be filed by his legal guardian or guardians, or, in the absence 
thereof, by the person (or persons) who has the child in his care. 

Cost-of-Living Increases in Benefits 

( 1 ) ( 1 ) For purposes of this subsection — 

(A) the term "base quarter*' means (i) the calendar quarter 
ending on March 31 in each year after 1974, or (ii) any other cal- 
endar quarter in which occurs the effective month of a general 
benefit increase under this title ; 

(B) the term "cost-of-living computation quarter" means a base 
quarter, as defined in subparagraph (A)(i), in which the Con- 
sumer Price Index prepared by the Department of Labor exceeds, 
by not less than 3 per centum, such Index in the later of (i) the 
last prior cost-of-living computation quarter which was estab- 
lished under this subparagraph, or (ii) the most recent calendar 
quarter in which occurred the effective month of a general benefit 
increase under this title; except that there shall be no cost-of- 
living computation quarter in any calendar year if in the year 
prior to such year a law has been enacted providing a general 
benefit increase under this title or if in such prior year such a 
general benefit increase becomes effective ; and 

(C) the Consumer Price Index for a base quarter, a cost-of- 
living computation quarter, or any other calendar quarter shall 
be the arithmetical mean of such index for the 3 months in such 
quarter. 

(2) (A)(i) The Secretary shall determine each year beginning with 
1975 (subject to the limitation in paragraph (1) (B) ) whether the base 
quarter (as defined in paragraph (l)(A)(i)) in such year is a cost-of- 
living computation quarter. 

(ii) If the Secretary determines that the base quarter in any year 
is a cost-of-living computation quarter, he shall, effective with the 
month of June of such year as provided in subparagraph (B) , increase 
the benefit amount of each individual who for such month is entitled 
to benefits under section 227 or 228, and the primary insurance amount 
of each other individual under this title (but not including a primary 
insurance amount determined under subsection (a)(3) of this section) , 
by an amount derived by multiplying each such amount (including 
each such individual's primary insurance amount or benefit amount 
under section 227 or 228 as previously increased under this subpara- 
graph) by the same percentage (rounded to the nearest one-tenth of 1 



135 



Sec. 215(i) 



percent) as the percentage by which the Consumer Price Index for 
such cost-of-living computation quarter exceeds such index for the 
most recent prior calendar quarter which was a base quarter under 
paragraph (1) (A) (ii) or, if later, the most recent cost-of-living com- 
putation quarter under paragraph (1) (B) . Any such increased amount 
which is not a multiple of $0.10 shall be increased to the next higher 
multiple of $0.10. 

(B) The increase provided by subparagraph (A) with respect to a 
particular cost-of-living computation quarter shall apply in the case 
of monthly benefits under this title for months after May of the calen- 
dar year in which occurred such cost-of-living computation quarter, 
and in the case of lump-sum death payments with respect to deaths 
occurring after May of such calendar year. 

(C) (i) Whenever the level of the Consumer Price Index as pub- 
lished for any month exceeds by 2.5 percent or more the level of such 
index for the most recent base quarter (as defined in paragraph (1) 
(A) (ii) ) or, if later, the most recent cost-of-living computation quar- 
ter, the Secretary shall (within 5 days after such publication) report 
the amount of such excess to the House Committee on Ways and 
Means and the Senate Committee on Finance. 

(ii) Whenever the Secretary determines that a base quarter in a 
calendar year is also a cost-of-living computation quarter, he shall 
notif v the House Committee on Wavs and Means and the Senate Com- 
mittee on Finance of such determination within 30 days after the close 
of such quarter, indicating the amount of the benefit increase to be pro- 
vided, his estimate of the extent to which the cost of such increase 
would be met by an increase in the contribution and benefit base under 
section 230 and the estimated amount of the increase in such base, the 
actuarial estimates of the effect of such increase, and the actuarial as- 
sumptions and methodology used in preparing such estimates. 

(D) If the Secretary determines that a base quarter in a calendar 
year is also a cost-of-living computation quarter, he shall publish in 
the Federal Register within 45 days after the close of such quarter, a 
determination that a benefit increase is resultantly required and the 
percentage thereof. He shall also publish in the Federal Register at 
that time (along with the increased benefit amounts which shall be 
deemed to be the amounts appearing in sections 227 and 228) a revision 
of the table of benefits contained in subsection (a) of this section (as 
it may have been most recently revised by another law or pursuant 
to this paragraph) ; and such revised table shall be deemed to be the 
table appearing in such subsection (a). Such revision shall be deter- 
mined as follows : 

(i) The headings of the table shall be the same as the headings 
in the table immediately prior to its revision, except that the 
parenthetical phrase at the beginning of column II shall reflect 



Sec. 215(i) 



136 



the year in which the primary insurance amounts set forth in 
column IV of the table immediately prior to its revision were 
effective. 

(ii) The amounts on each line of column I and column III, 
except as otherwise provided by clause (v) of this subparagraph, 
shall be the same as the amounts appearing in each such column 
in the table immediately prior to its revision. 

(iii) The amount on each line of column II shall be changed 
to the amount shown on the corresponding line of column IV 
of the table immediately prior to its revision. 

(iv) The amounts on each line of column IV and column V 
shall be increased from the amounts shown in the table immedi- 
ately prior to its revision by increasing each such amount by the 
percentage specified in subparagraph (A) (ii) of this paragraph. 
The amount on each line of column V shall be increased, if neces- 
sary, so that such amount is at least equal to one and one-half 
times the amount shown on the corresponding line in column IV. 
Any such increased amount which is not a multiple of $0.10 shall 
be increased to the next higher multiple of $0.10. 

(v) If the contribution and benefit base (determined under 
section 230) for the calendar year in which the table of benefits is 
revised is lower than such base for the following calendar year, 
columns III, IV, and V of such table shall be extended. The 
amounts on each additional line of column III shall be the amounts 
on the preceding line increased by $5 until in the last such line of 
column III the second figure is equal to one-twelfth of the new 
contribution and benefit base for the calendar year following the 
calendar year in which such table of benefits is revised. The amount 
on each additional line of column IV shall be the amount on the 
preceding line increased by $1.00, until the amount on the last line 
of such column is equal to the last line of such column as deter- 
mined under clause (iv) plus 20 percent of one-twelfth of the 
excess of the new contribution and benefit base for the calendar 
year following the calendar year in which such table of benefits is 
revised (as determined under section 230) over such base for the 
calendar year in which the table of benefits is revised. The amount 
in each additional line of column V shall be equal to 1.75 times the 
amount on the same line of column IV. Any such increased amount 
which is not a multiple of $0.10 shall be increased to the next 
higher multiple of $0.10 

(3) As used in this subsection, the term "general benefit increase 
under this title" means an increase (other than an increase under this 
subsection) in all primary insurance amounts on which monthly in- 
surance benefits under this title are based. 



137 



Sec. 216(g) 



Other Definitions 

Sec. 216. For the purposes of this title — 

(a) [Repealed.] 

Wife 

(b) The term "wife" means the wife of an individual, but only if 
she (1) is the mother of his son or daughter, (2) was married to him 
for a period of not less than one year immediately preceding the day 
on which her application is filed, or (3) in the month prior to the 
month of her marriage to him (A) was entitled to, or on application 
therefor and attainment of age 62 in such prior month would have 
been entitled to, benefits under subsection (b), (e), or (h) of section 
202, (B) had attained age eighteen and was entitled to, or on applica- 
tion therefor would have been entitled to, benefits under subsection 

(d) of such section (subject, however, to section 202 (s)), or (C) was 
entitled to, or upon application therefor and attainment of the re- 
quired age (if any) would have been entitled to, a widow's, child's 
(after attainment of age 18) , or parent's insurance annuity under sec- 
tion 2 of the Railroad Retirement Act of 1974, as amended. 

Widow 

(c) The term "widow" (except when used in section 202 (i) ) means 
the surviving wife of an individual, but only if (1) she is the mother 
of his son or daughter, (2) she legally adopted his son or daughter 
while she was married to him and while such son or daughter was 
under the age of eighteen, (3) he legally adopted her son or daughter 
while she was married to him and while such son or daughter was 
under the age of eighteen, (4) she was married to him at the time 
both of them legally adopted a child under the age of eighteen, (5) 
she was married to him for a period of not less than nine months 
immediately prior to the day on which he died, or (6) in the month 
prior to the month of her marriage to him (A) she was entitled to, 
or on application therefor and attainment of age 62 in such prior 
month would have been entitled to, benefits under subsection (b), 

(e) , or (h) of section 202, (B) she had attained age eighteen and 
was entitled to, or on application therefor would have been entitled 
to, benefits under subsection (d) of such section (subject, however, 
to section 202 (s)), or (C) she was entitled to, or upon application 
therefor and attainment of the required age (if any) would have 
been entitled to, a widow's, child's (after attainment of age 18), or 
parent's insurance annuity under section 2 of the Railroad Retirement 
Act of 1974, as amended. 

Divorced Wives; Divorce 

(d) (1) The term "divorced wife" means a woman divorced from 
an individual, but only if she had been married to such individual for 

64-310 O - 76 - 10 



Sec. 216(e) 



138 



a period of 20 years immediately before the date the divorce became 
effective. 

(2) The term "surviving divorced wife" means a woman divorced 
from an individual who has died, but only if she had been married 
to the individual for a period of 20 years immediately before the date 
the divorce became effective. 

(3) The term "surviving divorced mother" means a woman di- 
vorced from an individual who has died, but only if (A) she is the 
mother of his son or daughter, (B) she legally adopted his son or 
daughter while she was married to him and while such son or daughter 
was under the age of 18, (C) he legally adopted her son or daughter 
while she was married to him and while such son or daughter was 
under the age of 18, or (D) she was married to him at the time both 
of them legally adopted a child under the age of 18. 

(4) The terms "divorce" and "divorced" refer to a divorce a vin- 
culo matrimonii. 

Child 

(e) The term "child" means (1) the child or legally adopted child 
of an individual, (2) a stepchild who has been such stepchild for 
not ]ess than one year immediately preceding the day on which appli- 
cation for child's insurance benefits is filed or (if the insured individual 
is deceased) not less than nine months immediately preceding the 
day on which such individual died, and (3) a person who is the grand- 
child or stepgrandchild of an individual or his spouse, but only if (A) 
there was no natural or adoptive parent (other than such a parent 
who was under a disability, as defined in section 223(d) ) of such per- 
son living at the time (i) such individual became entitled to old-age 
insurance benefits or disability insurance benefits or died, or (ii) if 
such individual had a period of disability which continued until such 
individual became entitled to old-age insurance benefits or disability 
insurance benefits, or died, at the time such period of disability began, 
or (B) such person was legally adopted after the death of such indi- 
vidual by such individual's surviving spouse in an adoption that was 
decreed by a court of competent jurisdiction within the United States 
and such person's natural or adopting parent or stepparent was not 
living in such individual's household and making regular contributions 
toward such person's support at the time such individual died. For 
purposes of clause ( 1 ) , a person shall be deemed, as of the date of death 
of an individual, to be the legally adopted child of such individual if 
such person was at the time of such individual's death living in such 
individual's household and was legally adopted by such individual's 
surviving spouse after such individual's death but only if (A) pro- 
ceedings for the adoption of the child had been instituted by such indi- 
vidual before his death, or (B) such child was adopted by such indi- 
vidual's surviving spouse before the end of two years after (i) the 



139 



Sec. 216(g) 



day on which such individual died or (ii) the date of enactment of 
the Social Security Amendments of 1958; except that this sentence 
shall not apply if at the time of such individual's death such person 
was receiving regular contributions toward his support from someone 
other than such individual or his spouse, or from any public or private 
welfare organization which furnishes services or assistance for chil- 
dren. For purposes of clause (2), a person who is not the stepchild 
of an individual shall be deemed the stepchild of such individual if 
such individual was not the mother or adopting mother or the father 
or adopting father of such person and such individual and the mother 
or adopting mother, or the father or adopting father, as the case may 
be, if such person went through a marriage ceremony resulting in a 
purported marriage between them which, but for a legal impediment 
described in the last sentence of subsection (h) (1) (B), would have 
been a valid marriage. 

Husband 

(f) The term "husband" means the husband of an individual, but 
only if (1) he is the father of her son or daughter, (2) he was married 
to her for a period of not less than one year immediately preceding the 
day on which his application is filed, or (3) in the month prior to the 
month of his marriage to her (A) he was entitled to, or on applica- 
tion therefor and attainment of age 62 in such prior month would 
have been entitled to, benefits under subsection (f), or (h) of section 
202, (B) he had attained age eighteen and was entitled to, or on 
application therefor would have been entitled to, benefits under sub- 
section (d) of such section (subject, however, to section 202 (s)), or 
(C) he was entitled to, or upon application therefor and attainment of 
the required age (if any) he would have been entitled to, a widower's, 
child's (after attainment of age 18), or parents' insurance annuity 
under section 2 of the Railroad Retirement Act of 1974, as amended. 

Widower 

(g) The term "widower" (except when used in section 202 (i)) 
means the surviving husband of an individual, but only if (1) he is the 
father of her son or daughter, (2) he legally adopted her son or daugh- 
ter while he was married to her and while such son or daughter was 
under the age of eighteen, (3) she legally adopted his son or daughter 
while he was married to her and while such son or daughter was under 
the age of eighteen, (4) he was married to her at the time both of them 
legally adopted a child under the age of eighteen, (5) he was married 
to her for a period of not less than nine months immediately prior 
to the day on which she died, or (6) in the month before the month of 
his marriage to her (A) he was entitled to, or on application there- 
for and attainment of age 62 in such prior month would have been 
entitled to, benefits under subsection (f), or (h) of section 202, (B) 



Sec. 216(h) 



140 



he had attained age eighteen and was entitled to, or on application 
therefor would have been entitled to, benefits under subsection (d) 
of such section (subject, however, to section 202(s)), or (C) he was 
entitled to ; or on application therefor and attainment of the required 
age (if any) he would have been entitled to a widower's, child's 
(after attainment of age 18), or parent's insurance annuity under sec- 
tion 2 of the Railroad Retirement Act of 1974, as amended. 

Determination of Family Status 

(h) (1) (A) An applicant is the wife, husband, widow, or widower 
of a fully or currently insured individual for purposes of this title if 
the courts of the State in which such insured individual is domiciled 
at the time such applicant files an application, or, if such insured indi- 
vidual is dead, the courts of the State in which he was domiciled at the 
time of death, or, if such insured individual is or was not so domiciled 
in any State, the courts of the District of Columbia, would find that 
such applicant and such insured individual were validly married at 
the time such applicant files such application or, if such insured indi- 
vidual is dead, at the time he died. If such courts would not find that 
such applicant and such insured individual were validly married at 
such time, such applicant shall, nevertheless be deemed to be the wife, 
husband, widow, or widower, as the case may be, of such insured indi- 
vidual if such applicant would, under the laws applied by such courts 
in determining the devolution of interstate personal property, have the 
same status with respect to the taking of such property as a wife, hus- 
band, widow, or widower of such insured individual. 

(B) In any case where under subparagraph (A) an applicant is not 
(and is not deemed to be) the wife, widow, husband, or widower of a 
fully or currently insured individual, or where under subsection (b), 
(c), (f), or (g) such applicant is not the wife, widow, husband, or 
widower of such individual, but it is established to the satisfaction of 
the Secretary that such applicant in good faith went through a mar- 
riage ceremony with such individual resulting in a purported mar- 
riage between them which, but for a legal impediment not known to 
the applicant at the time of such ceremony, would have been a valid 
marriage, and such applicant and the insured individual were living 
in the same household at the time of the death of such insured indi- 
vidual or (if such insured individual is living) at the time such appli- 
cant files the application, then, for purposes of subparagraph (A) and 
subsections. (b), (c), (f), and (g), such purported marriage shall be 
deemed to be a valid marriage. The provisions of the preceding sen- 
tence shall not apply (i) if another person is or has been entitled to 
a benefit under subsection (b), (c), (e), (f),or (g) of section 202 
on the basis of the wages and self-employment income of such insured 
individual and such other person is (or is deemed to be) a wife, widow, 



141 



Sec. 216(h) 



husband, or widower of such insured individual under subparagraph 
(A) at the time such applicant files the application, or (ii) if the 
Secretary determines, on the basis of information brought to his atten- 
tion, that such applicant entered into such purported marriage with 
such insured individual with knowledge that it would not be a valid 
marriage. The entitlement to a monthly benefit under subsection (b), 
(c), (e), (f), or (g) of section 202, based on the wages and self-em- 
ployment income of such insured individual, of a person who would 
not be deemed to be a wife, widow, husband, or widower of such in- 
sured individual but for this subparagraph, shall end with the month 
before the month (i) in which the Secretary certifies, pursuant to 
section 205 (i), that another person is entitled to a benefit under sub- 
section (b), (c), (e), (f), or (g) of section 202 on the basis of the 
wages and self -employment income of such insured individual, if such 
other person is (or is deemed to be) the wife, widow, husband, or 
widower of such insured individual under subparagraph (A), or (ii) 
if the applicant is entitled to a monthly benefit under subsection (b) 
or (c) of section 202, in which such applicant entered into a mar- 
riage, valid without regard to this subparagraph, with a person other 
than such insured individual. For purposes of this subparagraph, a 
legal impediment to the validity of a purported marriage includes 
only an impediment (i) resulting from the lack of dissolution of a pre- 
vious marriage or otherwise arising out of such previous marriage or 
its dissolution, or (ii) resulting from a defect in the procedure fol- 
lowed in connection with such purported marriage. 

(2) (A) In determining whether an applicant is the child or parent 
of a fully or currently insured individual for purposes of this title, 
the Secretary shall apply such law as would be applied in determining 
the devolution of intestate personal property by the courts of the 
State in which such insured individual is domiciled at the time such 
applicant files application, or, if such insured individual is dead, by 
the courts of the State in which he was domiciled at the time of his 
death, or, if such insured individual is or was not so domiciled in any 
State, by the courts of the District of Columbia. Applicants who ac- 
cording to such law would have the same status relative to taking 
intestate personal property as a child or parent shall be deemed such. 

(B) If an applicant is a son or daughter of a fully or currently 
insured individual but is not (and is not deemed to be) the child of 
such insured individual under subparagraph ( A) , such applicant shall 
nevertheless be deemed to be the child of such insured individual if 
such insured individual and the mother or father, as the case may be, 
of such applicant went through a marriage ceremony resulting in a 
purported marriage between them which, but for a legal impediment 
described in the last sentence of paragraph (1) (B) , would have been a 
valid marriage. 



Sec. 216(h) 



142 



(3) An applicant who is the son or daughter of a fully or currently 
insured individual, but who is not (and is not deemed to be) the child 
of such insured individual under paragraph (2), shall nevertheless be 
deemed to be the child of such insured individual if : 

(A) in the case of an insured individual entitled to old-age 
insurance benefits (who was not, in the month preceding such 
entitlement, entitled to disability insurance benefits) — 

(i) such insured individual — 

(I) has acknowledged in writing that the applicant is 
his son or daughter, 

(II) has been decreed by a court to be the father of 
the applicant, or 

(III) has been ordered by a court to contribute to the 
support of the applicant because the applicant is his son 
or daughter, 

and such acknowledgement, court decree, or court order was 
made not less than one year before such insured individual 
became entitled to old-age insurance benefits or attained age 
65, whichever is earlier ; or 

(ii) such insured individual is shown by evidence satisfac- 
tory to the Secretary to be the father of the applicant and was 
living with or contributing to the support of the applicant 
at the time such insured individual became entitled to bene- 
fits or attained age 65, whichever first occurred ; 

(B) in the case of an insured individual entitled to disability 
insurance benefits, or who was entitled to such benefits in the 
month preceding the first month for which he was entitled to old- 
age insurance benefits — 

(i) such insured individual — 

(I) has acknowledged in writing that the applicant is 
his son or daughter, 

(II) has been decreed by a court to be the father of 
the applicant, or 

(III) has been ordered by a court to contribute to the 
support of the applicant because the applicant is his son 
or daughter, 

and such acknowledgement, court decree, or court order was 
made before such insured individual's most recent period of 
disability began ; or 

(ii) such insured individual is shown by evidence satis- 
factory to the Secretary to be the father of the applicant and 
was living with or contributing to the support of that appli- 
cant at the time such period of disability began ; 

(C) in the case of a deceased individual — 
(i) such insured individual — 



143 



Sec. 216(i) 



(I) had acknowledged in writing that the applicant is 
his son or daughter, 

(II) had been decreed by a court to be the father of 
the applicant, or 

(III) had been ordered by a court to contribute to the 
support of the applicant because the applicant was his 
son or daughter, 

and such acknowledgement, court decree, or court order was 
made before the death of such insured individual, or 

(ii) such insured individual is shown by evidence satis- 
factory to the Secretary to have been the father of the appli- 
cant, and such insured individual was living with or contrib- 
uting to the support of the applicant at the time such insured 
individual died. 

Disability; Period of Disability 

(1) (1) Except for purposes of section 202(d), 202(e), 202(f), 223, 
and 225, the term "disability" means (A) inability to engage in any 
substantial gainful activity by reason of any medically determinable 
physical or mental impairment which can be expected to result in 
death or has lasted or can be expected to last for a continuous period 
of not less than 12 months, or (B) blindness ; and the term "blindness" 
means central visual acuity of 20/200 or less in the better eye with the 
use of correcting lens. An eye which is accompanied by a limitation 
in the field of vision such that the widest diameter of the visual field 
subtends an angle no greater than 20 degrees shall be considered for 
purposes of this paragraph as having a central visual acuity of 20/200 
or less. The provisions of paragraphs (2) (A), (3), (4), and (5) of 
section 223(d) shall be applied for purposes of determining whether 
an individual is under a disability within the meaning of the first 
sentence of this paragraph in the same manner as they are applied for 
purposes of paragraph ( 1 ) of such section. Nothing in this title shall 
be construed as authorizing the Secretary or any other officer or 
employee of the United States to interfere in any way with the prac- 
tice of medicine or with relationships between practitioners of medi- 
cine and their patients, or to exercise any supervision or control over 
the administration or operation of any hospital. 

(2) (A) The term "period of disability" means a continuous period 
(beginning and ending as hereinafter provided in this subsection) 
during which an individual was under a disability (as defined in 
paragraph (1)), but only if such period is of not less than five full 
calendar months' duration or such individual was entitled to benefits 
under section 223 for one or more months in such period. 

(B) No period of disability shall begin as to any individual unless 
such individual files an application for a disability determination with 



Sec.216(i) 



144 



respect to such period ; and no such period shall begin as to any in- 
dividual after such individual attains the age of 65. 

In the case of a deceased individual, the requirement of an appli- 
cation under the preceding sentence may be satisfied by an application 
for a disability determination filed with respect to such individual 
within 3 months after the month in which he died. 

(C) A period of disability shall begin — 

(i) on the day the disability began, but only if the individual 
satisfies the requirements of paragraph (3) on such day; or 

(ii) if such individual does not satisfy the requirements of 
paragraph (3) on such day, then on the first day of the first quar- 
ter thereafter in which he satisfies such requirements. 

(D) A period of disability shall end with the close of whichever 
of the following months is the earlier: (i) the month preceding the 
month in which the individual attains age 65, or (ii) the second month 
following the month in which the disability ceases. 

(E) Except as is otherwise provided in subparagraph (F) , no appli- 
cation for a disability determination which is filed more than 12 
months after the month prescribed by subparagraph (D) as the month 
in which the period of disability ends (determined without regard to 
subparagraph (B) and this subparagraph) shall be accepted as an ap- 
plication for purposes of this paragraph. 

(F) An application for a disability determination which is filed 
more than 12 months after the month prescribed by subparagraph (D) 
as the month in which the period of disability ends (determined with- 
out regard to subparagraphs (B) and (E)) shall be accepted as an 
application for purposes of this paragraph if — 

(i) in the case of an application filed by or on behalf of an 
individual with respect to a disability which ends after the month 
in which the Social Security Amendments of 1967 is enacted, such 
application is filed not more than 36 months after the month in 
which such disability ended, such individual is alive at the time 
the application is filed, and the Secretary finds in accordance 
with regulations prescribed by him that the failure of such indi- 
vidual to file an application for a disability determination within 
the time specified in subparagraph (E) was attributable to a 
physical or mental condition of such individual which rendered 
him incapable of executing such an application, and 

(ii) in the case of an application filed by or on behalf of an 
individual with respect to a period of disability which ends in or 
before the month in which the Social Security Amendments of 
1967 as enacted, 

(I) such application is filed not more than 12 months 
after the month in which the Social Security Amendments of 
1967 is enacted, 



145 



Sec. 216(i) 



(II) a previous application for a disability determination 
has been filed by or on behalf of such individual (1) in or 
before the month in which the Social Security Amendments 
of 1967 is enacted, and (2) not more than 36 months after the 
month in which his disability ended, and 

(III) the Secretary finds in accordance with regulations 
prescribed by him, that the failure of such individual to file 
an application within the then specified time period was at- 
tributable to a physical or mental condition of such individ- 
ual which rendered him incapable of executing such an 
application. 

In making a determination under this subsection, with respect to the 
disability or period of disability of any individual whose application 
for a determination thereof is accepted solely by reason of the provi- 
sions of this subparagraph (F) , the provisions of this subsection (other 
than the provisions of this subparagraph) shall be applied as such 
provisions are in effect at the time such determination is made. 

(G) An application for a disability determination filed before the 
first day on which the applicant satisfies the requirements for a 
period of disability under this subsection shall be deemed a valid 
application only if the applicant satisfies the requirements for a period 
of disability before the Secretary makes a final decision on the ap- 
plication. If upon final decision by the Secretary, or decision upon 
judicial review thereof, such applicant is found to satisfy such re- 
quirements, the application shall be deemed to have been filed on such 
first day. 

(3) The requirements referred to in clauses (i) and (ii) of para- 
graph (2) (C) are satisfied by an individual with respect to any quar- 
ter only if — 

(A) he would have been a fully insured individual (as defined 
in section 214) had he attained age 62 and filed application for 
benefits under section 202(a) on the first day of such quarter; and 

(B) (i) he had not less than 20 quarters of coverage during the 
40-quarter period which ends with such quarter, or 

(ii) if such quarter ends before he attains (or would attain) 
age 31 not less than one-half (and not less than 6) of the quarters 
during the period ending with such quarter and beginning after 
he attained the age of 21 were quarters of coverage, or (if the 
number of quarters in such period is less than 12) not less than 
6 of the quarters in the 12-quarter period ending with such quar- 
ter were quarters of coverage, except that the provisions of sub- 
paragraph (B) of this paragraph shall not apply in the case of 
an individual who is blind (within the meaning of "blindness" as 
defined in paragraph (1) ). 



Sec. 216(k) 



146 



For purposes of subparagraph (B) of this paragraph, when the 
number of quarters in any period is an odd number, such number shall 
be reduced by one, and a quarter shall not be counted as part of any 
period if any part of such quarter was included in a prior period of 
disability unless such quarter was a quarter of coverage. 

(4) [Kepealed.] 

Periods of Limitations Ending on Nonwork Days 

(j) Where this title, any provision of another law of the United 
States (other than the Internal Revenue Code of 1954) relating to or 
changing the effect of this title, or any regulation issued by the Secre- 
tary pursuant thereto provides for a period within which an act is 
required to be done which affects eligibility for or the amount of any 
benefit or payment under this title or is necessary to establish or pro- 
tect any rights under this title, and such period ends on a Satur- 
day, Sunday, or legal holiday, or on any other day all or part of which 
is declared to be a nonwork day for Federal employees by statute or 
Executive order, then such act shall be considered as done within such 
period if it is done on the first day thereafter which is not a Saturday, 
Sunday, or legal holiday or any other day all or part of which is 
declared to be a nonwork day for Federal employees by statute or 
Executive order. For purposes of this subsection, the day on which a 
period ends shall include the day on which an extension of such period, 
as authorized by law or by the Secretary pursuant to law, ends. The 
provisions of this subsection shall not extend the period during which 
benefits under this title may (pursuant to section 202 ( j ) (1) or 223 (b) ) 
be paid for months prior to the day application for such benefits is 
filed, or during which an application for benefits under this title 
may (pursuant to section 202 (j) (2) or 223(b)) be accepted as such. 

Waiver of Nine-Month Requirement for Widow, Stepchild, or Widower in Case 
of Accidental Death or in Case of Serviceman Dying in Line of Duty, or in 
Case of Remarriage to the Same Individual 

(k) The requirement in clause (5) of subsection (c) or clause (5) 
of subsection (g) that the surviving spouse of an individual have been 
married to such individual for a period of not less than nine months 
immediately prior to the day on which such individual died in order 
to qualify as such individual's widow or widower, and the require- 
ment in subsection (e) that the stepchild of a deceased individual have 
been such stepchild for not less than nine months immediately preced- 
ing the day on which such individual died in order to qualify as such 
individual's child, shall be deemed to be satisfied, where such individ- 
ual dies within the applicable nine-month period, if — 

(1) his death — 

(A) is accidental, or 



147 



Sec. 217(a) 



(B) occurs in line of duty while he is a member of a uniformed 
service serving on active duty (as defined in section 210(1) (2)), 
unless the Secretary determines that at the time of the marriage in- 
volved the individual could not have reasonably been expected to live 
for nine months, or 

(2) (A) the widow or widower of such individual had been previ- 
ously married to such individual and subsequently divorced and such 
requirement would have been satisfied at the time of such divorce if 
such previous marriage had been terminated by the death of such 
individual at such time instead of by divorce ; or 

(B) the stepchild of such individual had been the stepchild of such 
individual during a previous marriage of such stepchild's parent to 
such individual which ended in divorce and such requirement would 
have been satisfied at the time of such divorce if such previous mar- 
riage had been terminated by the death of such individual at such 
time instead of by divorce; except that paragraph (2) of this sub- 
section shall not apply if the Secretary determines that at the time of 
the marriage involved the individual could not have reasonably been 
expected to live for nine months. For purposes of paragraph (1) (A) of 
this subsection, the death of an individual is accidental if he receives 
bodily injuries solely through violent, external, and accidental means 
and, as a direct result of the bodily injuries and independently of all 
other causes, loses his life not later than three months after the day 
on which he receives such bodily injuries. 

Benefits in Case of Veterans 

Sec. 217. (a) (1) For purposes of determining entitlement to and 
the amount of any monthly benefit for any month after August 1950, 
or entitlement to and the amount of any lump-sum death payment in 
case of a death after such month, payable under this title on the basis 
of the wages and self -employment income of any World War II vet- 
eran, and for purposes of section 216 (i) (3), such veteran shall be 
deemed to have been paid wages (in addition to the wages, if any, 
actually paid to him) of $160 in each month during any part of which 
he served in the active militarv or naval service of the United States 
during World War II. This subsection shall not be applicable in the 
case of any monthly benefit or lump-sum death payment if — 

(A) a larger such benefit or payment, as the case may be, would 
be payable without its application ; or 

(B) a benefit (other than a benefit payable in a lump sum 
unless it is a commutation of, or a substitute for, periodic pay- 
ments) which is based, in whole or in part, upon the active mili- 
tary or naval service of such veteran during World War II is 
determined by any agency or wholly owned instrumentality of the 



Sec. 217(b) 



148 



United States (other than the Veterans' Administration) to be 
payable by it under any other law of the United States or under 
a system established by such agency or instrumentality. The pro- 
visions of clause (B) shall not apply in the case of any monthly 
benefit or lump-sum death payment under this title if its applica- 
tion would reduce by $0.50 or less the primary insurance amount 
(as computed under section 215 prior to any recomputation thereof 
pursuant to subsection (f ) of such section) of the individual on 
whose wages and self -employment income such benefit or payment 
is based. The provisions of clause (B) shall also not apply for 
purposes of section 216 (i) (3). 

(2) Upon application for benefits or a lump-sum death payment on 
the basis of the wages and self -employment income of any World War 
II veteran, the Secretary of Health, Education, and Welfare shall 
make a decision without regard to clause (B) of paragraph (1) of this 
subsection unless he has been notified by some other agency or instru- 
mentality of the United States that, on the basis of the military or 
naval service of such veteran during World War II, a benefit described 
in clause (B) of paragraph (1) has been determined by such agency 
or instrumentality to be payable by it. If he has not been so notified, 
the Secretary of Health, Education, and Welfare shall then ascertain 
Avhether some other agencj 7 or wholly owned instrumentality of the 
United States has decided that a benefit described in clause (B) of 
paragraph (1) is payable by it. If any such agency or instrumentality- 
has decided, or thereafter decides, that such a benefit is payable by it, 
it shall so notify the Secretary of Health, Education, and Welfare, and 
the Secretary shall certify no further benefits for payment or shall 
recompute the amount of any further benefits payable, as may be 
required by paragraph (1) of this subsection. 

(3) Any agency or wholly owned instrumentality of the United 
States which is authorized by any law of the United States to pay 
benefits, or has a system of benefits which are based, in whole or in 
part, on military or naval service during World War II shall, at the 
request of the Secretary of Health, Education, and Welfare, certify 
to him, with respect to any veteran, such information as the Secretary 
deems necessary to carry out his functions under paragraph (2) of 
this subsection. 

(b) (1) Any World War II veteran who died during the period of 
three years immediately following his separation from the active mili- 
tary or naval service of the United States shall be deemed to have 
died a fully insured individual whose primary insurance amount is 
the amount determined under section 215(c). Notwithstanding sec- 
tion 215(d), the primary insurance benefit (for purposes of section 
215(c)) of such veteran shall be determined as provided in this title 
as in effect prior to the enactment of this section, except that the 1 per 



149 



Sec. 217(c) 



centum addition provided for in section 209(e) (2) of this Act as in 
effect prior to the enactment of this section shall be applicable only 
with respect to calendar years prior to 1951. This subsection shall not 
be applicable in the case of any monthly benefit or lump-sum death 
payment if — 

(A) a larger such benefit or payment, as the case may be, would 
be payable without its application ; 

(B) any pension or compensation is determined by the Vet- 
erans' Administration to be payable by it on the basis of the death 
of such veteran ; 

(C) the death of the veteran occurred while he was in the active 
military or naval service of the United States ; or 

(D) such veteran has been discharged or released from the 
active military or naval service of the United States subsequent 
to July 26, 1951. 

(2) Upon an application for benefits or a lump-sum death payment 
on the basis of the wages and self -employment income of any World 
War II veteran, the Secretary of Health, Education, and Welfare 
shall make a decision without regard to paragraph (1) (B) of this sub- 
section unless he has been notified by the Veterans' Administration 
that pension or compensation is determined to be payable by the Vet- 
erans' Administration by reason of the death of such veteran. The 
Secretary of Health, Education, and Welfare shall thereupon report 
such decision to the Veterans' Administration. If the Veterans' Ad- 
ministration in any such case has made an adjudication or thereafter 
makes an adjudication that any pension or compensation is payable 
under any law administered by it, it shall notify the Secretary of 
Health, Education, and Welfare, and the Secretary shall certify no 
further benefits for payment, or shall recompute the amount of any 
further benefits payable, as may be required by paragraph (1) of this 
subsection. Any payment theretofore certified by the Secretary of 
Health, Education, and Welfare on the basis of paragraph (1) of this 
subsection to any individual, not exceeding the amount of any accrued 
pension or compensation payable to him by the Veterans' Administra- 
tion, shall (notwithstanding the provisions of section 3101 of title 38, 
United States Code) be deemed to have been paid to him by such 
Administration on account of such accrued pension or compensation. 
No such payment certified by the Secretary of Health, Education, and 
Welfare, and no payment certified by him for any month prior to the 
first month for which any pension or compensation is paid by the 
Veterans' Administration shall be deemed by reason of this subsection 
to have been an erroneous payment. 

(c) In the case of any World War II veteran to whom subsection 
(a) is applicable, proof of support required under section 202(h) may 



Sec. 217(d) 



150 



be filed by a parent at any time prior to July 1951 or prior to the 
expiration of two years after the date of the death of such veteran, 
whichever is the later. 

(d) For the purposes of this section — 

( 1 ) The term "World War II" means the period beginning with 
September 16, 1940, and ending at the close of July 24, 1947. 

(2) The term "World War II veteran" means any individual 
who served in the active military or naval service of the United 
States at any time during World War II and who, if discharged 
or released therefrom, was so discharged or released under condi- 
tions other than dishonorable after active service of ninety days or 
more or by reason of a disability or injury incurred or aggravated 
in service in line of duty ; but such term shall not include any indi- 
vidual who died while in the active military or naval service of 
the United States if his death was inflicted (other than by an 
enemy of the United States) as lawful punishment for a military 
or naval offense. 

(e) (1) For purposes of determining entitlement to and the amount 
of any monthly benefit or lump-sum death payment payable under this 
title on the basis of the wages and self -employment income of any vet- 
eran (as defined in paragraph (4) ) , and for purposes of section 216 (i) 
(3) , such veteran shall be deemed to have been paid wages (in addition 
to the wages, if any, actually paid to him) of $160 in each month during 
any part of which he served in the active military or naval service of 
the United States on or after July 25, 1947, and prior to January 1, 
1957. This subsection shall not be applicable in the case of any monthly 
benefit or lump-sum death payment if — 

(A) a larger such benefit or payment, as the case may be, would 
be payable without its application ; or 

(B) a benefit (other than a benefit payable in a lump sum unless 
it is a commutation of, or a substitute for, periodic payments) 
which is based, in whole or in part, upon the active military or 
naval service of such veteran on or after July 25, 1947, and prior 
to January 1, 1957, is determined by an agency or wholly owned 
instrumentality of the United States (other than the Veterans' 
Administration) to be payable by it under any other law of the 
United States or under a system established by such agency or 
instrumentality. 

The provisions of clause (B) shall not apply in the case of any monthly 
benefit or lump-sum death payment under this title if its application 
would reduce by $0.50 or less the primary insurance amount (as com- 
puted under section 215 prior to any recomputation thereof pursuant 
to subsection (f ) of such section) of the individual on whose wages 
and self-employment income such benefit or payment is based. The 



151 



Sec. 217(e) 



provisions of clause (B) shall also not apply for purposes of section 
216 (i) (3). In the case of monthly benefits under this title for months 
after December 1956 (and any lump-sum death payment under this 
title with respect to a death occurring after December 1956) based on 
the wages and self-employment income of a veteran who performed 
service (as a member of a uniformed service) to which the provisions 
of section 210(1) (1) are applicable, wages which would, but for the 
provisions of clause (B), be deemed under this subsection to have been 
paid to such veteran with respect to his active military or naval service 
performed after December 1950 shall be deemed to have been paid to 
him with respect to such service notwithstanding the provisions of 
such clause, but only if the benefits referred to in such clause which are 
based (in whole or in part) on such service are payable solely by the 
Army, Navy, Air Force, Marine Corps, Coast Guard, Coast and Geo- 
detic Survey or Public Health Service. 

(2) Upon application for benefits or a lump-sum death payment on 
the basis of the wages and self-employment income of any veteran, the 
Secretary of Health, Education, and Welfare shall make a decision 
without regard to clause (B) of paragraph (1) of this subsection un- 
less he has been notified by some other agency or instrumentality of the 
United States that, on the basis of the military or naval service of 
such veteran on or after July 25, 1947, and prior to January 1, 1957, 
a benefit described in clause (B) of paragraph (1) has been deter- 
mined by such agency or instrumentality to be payable by it. If he has 
not been so notified, the Secretary of Health, Education, and Welfare 
shall then ascertain whether some other agency or wholly owned in- 
strumentality of the United States has decided that a benefit described 
in clause (B) of paragraph (1) is payable by it. If any such agency or 
instrumentality has decided, or thereafter decides, that such a benefit 
is payable by it, it shall so notify the Secretary of Health, Education, 
and Welfare, and the Secretary shall certify no further benefits for 
payment or shall recompute the amount of any further benefits pay- 
able as may be required by paragraph (1) of this subsection. 

(3) Any agency or wholly owned instrumentality of the United 
States which is authorized by any law of the United States to pay 
benefits, or has a system of benefits which are based, in whole or in 
part, on military or naval service on or after July 25, 1947, and prior 
to January 1, 1957, shall, at the request of the Secretary of Health, 
Education, and Welfare, certify to him. with respect to any veteran, 
such information as the Secretary deems necessary to carry out his 
functions under paragraph (2) of this subsection. 

(4) For the purposes of this subsection, the term "veteran" means 
any individual who served in the active military or naval service of 



Sec. 217(f) 



152 



the United States at any time on or after July 25, 1947, and prior to 
January 1, 1957, and who, if discharged or released therefrom, was 
so discharged or released under conditions other than dishonorable 
after active service of ninety days or more or by reason of a disability 
or injury incurred or aggravated in service in line of duty; but such 
term shall not include any individual who died while in the active 
military or naval service of the United States if his death was inflicted 
(other than by an enemy of the United States) as lawful punishment 
for a military or naval offense. 

(f) (1) In any case where a World War II veteran (as defined in 
subsection (d)(2)) or a veteran (as defined in subsection (e) (4) ) has 
died or shall hereafter die, and his widow or child is entitled under 
subchapter III of chapter 83 of title 5, United States Code, to an 
annuity in the computation of which his active military or naval 
service was included, clause (B) of subsection (a) (1) or clause (B) 
of subsection (e) (1) shall not operate (solely by reason of such an- 
nuity) to make such subsection inapplicable in the case of any monthly 
benefit under section 202 which is based on his wages and self -employ- 
ment income; except that no such widow or child shall be entitled 
under section 202 to any monthly benefit in the computation of which 
such service is included by reason of this subsection (A) unless such 
widow or child after December 1956 waives his or her right to re- 
ceive such annuity, or (B) for any month prior to the first month 
with respect to which the Civil Service Commission certifies to the 
Secretary of Health, Education, and Welfare that (by reason of such 
waiver) no further annuity will be paid to such widow or child under 
such subchapter III on the basis of such veteran's military or civilian 
service. Any such waiver shall be irrevocable. 

(2) Whenever a widow waives her right to receive such annuity 
such waiver shall constitute a waiver on her own behalf ; a waiver by 
a legal guardian or guardians, or, in the absence of a legal guardian, 
the person (or persons) who has the child in his care, of the child's 
right to receive such annuity shall constitute a waiver on behalf of 
such child. Such a waiver with respect to an annuity based on a vet- 
eran's service shall be valid only if the widow and all children, or, 
if there is no widow, all the children, waive their rights to receive 
annuities under subchapter III of chapter 83 of title 5, United States 
Code, based on such veteran's military or civilian service. 

(g) (1) In September 1965, and in every fifth September thereafter 
up to and including September 2010, the Secretary shall determine 
the amount which, if paid in equal installments at the beginning of 
each fiscal year in the period beginning — 

(A) with July 1, 1965, in the case of the first such determina- 
tion, and 



153 



Sec. 217(h) 



(B) with the July 1 following the determination in the case 
of all other such determinations, 
and ending with the close of June 30, 2015, would accumulate, with 
interest compounded annually, to an amount equal to the amount 
needed to place each of the Trust Funds and the Federal Hospital 
Insurance Trust Fund in the same position at the close of June 30, 
2015, as he estimates they would otherwise be in at the close of that 
date if section 210 of this Act as in effect prior to the Social Security 
Act Amendments of 1950, and this section, had not been enacted. The 
rate of interest to be used in determining such amount shall be the 
rate determined under section 201(d) for public-debt obligations 
which were or could have been issued for purchase by the Trust Funds 
in the June preceding the September in which such determination is 
made. 

(2) There are authorized to be appropriated to the Trust Funds 
and the Federal Hospital Insurance Trust Fund — 

(A) for the fiscal year ending June 30, 1966, an amount equal 
to the amount determined under paragraph (1) in September 

1965, and 

(B) for each fiscal year in the period beginning with July 1, 

1966, and ending with the close of June 30, 2015, an amount equal 
to the annual installment for such fiscal year under the most re- 
cent determination under paragraph (1) which precedes such 
fiscal year. 

(3) For the fiscal year ending June 30, 2016, there is authorized to 
be appropriated to the Trust Funds and the Federal Hospital In- 
surance Trust Fund such sums as the Secretary determines would 
place the Trust Funds and the Federal Hospital Insurance Trust Fund 
in the same position in which they would have been at the close of 
June 30, 2015, if section 210 of this Act as in effect prior to the Social 
Security Act Amendments of 1950, and this section, had not been 
enacted. 

(4) There are authorized to be appropriated to the Trust Funds 
and the Federal Hospital Insurance Trust Fund annually, as benefits 
under this title and part A of title XVIII are paid after June 30, 2015, 
such sums as the Secretary determines to be necessary to meet the 
additional costs resulting from subsections (a), (b), and (e), of such 
benefits (including lump-sum death payments). 

Gratuitous Wage Credits for American Citizens Who Served in the Armed 

Forces of Allied Countries 

(h) (1) For the purposes of this section, any individual who the 
Secretary finds — 



64-310 O - 76 - 11 



Sec. 218(a) 



154 



(A) served during World War II (as defined in subsection 
(d)(1)) in the active military or naval service of a country which 
was on September 16, 1940, at war with a country with which the 
United States was at war during World War II ; 

(B) entered into such active service on or before December 8, 
1941; 

(C) was a citizen of the United States throughout such period 
of service or lost his United States citizenship solely because of 
his entrance into such service; 

(D) had resided in the United States for a period or periods 
aggregating four years during the five-year period ending on the 
day of, and was domiciled in the United States on the day of, such 
entrance into such active service; and 

(E) (i) was discharged or released from such service under con- 
ditions other than dishonorable after active service of ninety days 
or more or by reason of a disability or injury incurred or aggra- 
vated in service in line of duty, or 

(ii) died while in such service, 
shall be considered a World War II veteran (as defined in subsection 
(d) (2) ) and such service shall be considered to have been performed 
in the active military or naval service of the United States. 

(2) In the case of any individual to whom paragraph (1) applies, 
proof of support required under section 202 (f) or (h) may be filed 
at any time prior to the expiration of two years after the date of such 
individual's death or the date of the enactment of this subsection, 
whichever is the later. 

Voluntary Agreements for Coverage of State and Local 

Employees 

Purpose of Agreement 

Sec. 218. (a) (1) The Secretary of Health, Education, and Welfare 
shall, at the request of any State, enter into an agreement with such 

State for the purpose of extending the insurance system established 
by this title to services performed by individuals as employees of such 
State or any political subdivision thereof. Each such agreement shall 
contain such provisions, not inconsistent with the provisions of this 
section, as the State may request. 

(2) Notwithstanding section 210(a), for the purposes of this title 
the term "employment" includes any service included under an agree- 
ment entered into under this section. 

Definitions 

(b) For the purposes of this section — 

(1) The term "State" does not include the District of Columbia, 
Guam or American Samoa. 



155 



Sec. 218(c) 



(2) The term "political subdivision" includes an instrumen- 
tality of (A) a State, (B) one or more political subdivisions of a 
State, or (C) a State and one or more of its political subdivisions. 

(3) The term "employee" includes an officer of a State or politi- 
cal subdivision. 

(4) The term "retirement system" means a pension, annuity, 
retirement, or similar fund or system established by a State or by 
a political subdivision thereof. 

(5) The term "coverage group" means (A) employees of the State 
other than those engaged in performing service in connection with a 
proprietary function; (B) employees of a political subdivision of a 
State other than those engaged in performing service in connection 
with a proprietary function ; (C) employees of a State engaged in per- 
forming service in connection with a single proprietary function ; or 
(D) employees of a political subdivision of a State engaged in per- 
forming service in connection with a single proprietary function. If 
under the preceding sentence an employee would be included in more 
than one coverage group by reason of the fact that he performs service 
in connection with two or more proprietary functions or in connection 
with both a proprietary function and a nonproprietary function, he 
shall be included in only one such coverage group. The determination 
of the coverage group in which such employee shall be included shall 
be made in such manner as may be specified in the agreement. Persons 
employed under section 709 of title 32, United States Code, who elected 
under section 6 of the National Guard Technicians Act of 1968 to 
remain covered by an employee retirement system of, or plan sponsored 
by, a State or the Commonwealth of Puerto Rico, shall, for the pur- 
poses of this Act, be employees of the State or the Commonweath of 
Puerto Rico and (notwithstanding the preceding provisions of this 
paragraph) , shall be deemed to be a separate coverage group. For pur- 
poses of this section, individuals employed pursuant to an agreement, 
entered into pursuant to section 205 of the Agricultural Marketing 
Act of 1946 (7 U.S.C. 1624) or section 14 of the Perishable Agri- 
cultural Commodities Act, 1930 (7 U.S.C. 499n) , between a State and 
the United States Department of Agriculture to perform services as 
inspectors of agricultural products may be deemed, at the option of 
the State, to be employees of the State and (notwithstanding the pre- 
ceding provisions of this paragraph) shall be deemed to be a separate 
coverage group. 

Services Covered 

(c) (1) An agreement under this section shall be applicable to any 
one or more coverage groups designated by the State. 

(2) In the case of each coverage group to which the agreement ap- 
plies, the agreement must include all services (other than services 



Sec. 218(c) 



156 



excluded by or pursuant to subsection (d) or paragraph (3), (5), or 
(6) of this subsection) performed by individuals as members of such 
group. 

(3) Such agreement shall, if the State requests it, exclude (in the 
case of any coverage group) any one or more of the following : 

(A) All services in any class or classes of (i) elective positions, 
(ii) part-time positions, or (iii) positions the compensation for 
which is on a fee basis ; 

(B) All services performed by individuals as members of a 
coverage group in positions covered by a retirement system on 
the date such agreement is made applicable to such coverage group, 
but only in the case of individuals who, on such date (or, if 
later, the date on which they first occupy such positions), are 
not eligible to become members of such system and whose services 
in such positions have not already been included under such 
agreement pursuant to subsection (d) (3). 

(4) The Secretary of Health, Education, and Welfare shall, at the 
request of any State, modify the agreement with such State so as to 
(A) include any coverage group to which the agreement did not pre- 
viously apply, or (B) include, in the case of any coverage group to 
which the agreement applies, services previously excluded from the 
agreement ; but the agreement as so modified may not be inconsistent 
with the provisions of this section applicable in the case of an original 
agreement with a State. A modification of an agreement pursuant to 
clause (B) of the preceding sentence may apply to individuals to 
whom paragraph (3) (B) is applicable (whether or not the previous 
exclusion of the service of such individuals was pursuant to such para- 
graph) , but only if such individuals are, on the effective date specified 
in such modification, ineligible to be members of any retirement sys- 
tem or if the modification with respect to such individuals is pursuant 
to subsection (d) (3). 

(5) Such agreement shall, if the State requests it, exclude (in the 
case of any coverage group) any agricultural labor, or service per- 
formed by a student, designated by the State. This paragraph shall 
apply only with respect to service which is excluded from employment 
by any provision of section 210(a) other than paragraph (7) of such 
section and service the remuneration for which is excluded from wages 
by paragraph (2) of section 209 (h) . 

(6) Such agreement shall exclude — 

(A) service performed by an individual who is employed to 
relieve him from unemployment, 

(B) service performed in a hospital, home, or other institution 
by a patient or inmate thereof, 



157 



Sec. 218(d) 



(C) covered transportation service (as determined under sec- 
tion 210 (k), and 

(D) service (other than agricultural labor or service performed 
by a student) which is excluded from employment by any pro- 
vision of section 210(a) other than paragraph (7) of such section, 
and 

(E) service performed by an individual as an employee serving 
on a temporary basis in case of fire, storm, snow, earthquake, 
flood, or other similar emergency. 

(7) No agreement may be made applicable (either in the original 
agreement or by any modification thereof) to service performed by 
any individual to whom paragraph (3) (B) is applicable unless such 
agreement provides (in the case of each coverage group involved) 
either that the service of any individual to whom such paragraph is 
applicable and who is a member of such coverage group shall con- 
tinue to be covered by such agreement in case he thereafter becomes 
eligible to be a member of a retirement system, or that such service 
shall cease to be so covered when he becomes eligible to be a member 
of such a system (but only if the agreement is not already applicable 
to such system pursuant to subsection (d)(3)), whichever may be 
desired by the State. 

(8) Notwithstanding any other provision of this section, the agree- 
ment with any State entered into under this section may at the 
option of the State be modified on or after January 1, 1968, to exclude 
service performed by election officials or election workers if the remu- 
neration paid in a calendar quarter for such service is less than $50. 
Any modification of an agreement pursuant to this paragraph shall 
be effective with respect to services performed after an effective date, 
specified in such modification, which shall not be earlier than the 
last day of the calendar quarter in which the modification is mailed or 
delivered by other means to the Secretary. 

Positions Covered by Retirement Systems 

(d) (1) No agreement with any State may be made applicable 
(either in the original agreement or by any modification thereof) to 
any service performed by employees as members of any coverage 
group in positions covered by a retirement system either (A) on the 
date such agreement is made applicable to such coverage group, or 
(B) on the date of enactment of the succeeding paragraph of this sub- 
section (except in the case of positions which are, by reason of action 
by such State or political subdivision thereof, as may be appropriate, 
taken prior to the date of enactment of such succeeding paragraph, 
no longer covered by a retirement system on the date referred to in 



Sec. 218(d) 



158 



clause (A), and except in the case of positions excluded by para- 
graph (5) (A). The preceding sentence shall not be applicable to any 
service performed by an employee as a member of any coverage 
group in a position (other than a position excluded by paragraph 
(5) (A) ) covered by a retirement system on the date an agreement is 
made applicable to such coverage group, if on such date (or, if later, 
the date on which such individual first occupies such position), such 
individual is ineligible to be a member of such system. 

(2) It is hereby declared to be the policy of the Congress in enact- 
ing the succeeding paragraphs of this subsection that the protection 
afforded employees in positions covered by a retirement system on 
the date an agreement under this section is made applicable to serv- 
ice performed in such positions, or receiving periodic benefits under 
such retirement system at such time, will not be impaired as a result 
of making the agreement so applicable or as a result of legislative 
enactment in anticipation thereof. 

(3) Noth withstanding paragraph (1), an agreement with a State 
may be made applicable (either in the original agreement or by any 
modification thereof) to service performed by employees in positions 
covered by a retirement system (including positions specified in para- 
graph (4) but not including positions excluded by or pursuant to 
paragraph (5) ) , if the governor of the State, or an official of the State 
designated by him for the purpose, certifies to the Secretary of Health, 
Education, and Welfare that the following conditions have been met : 

(A) A referendum by secret written ballot was held on the 
question of whether service in positions covered by such retire- 
ment system should be excluded from or included under an 
agreement under this section ; 

(B) An opportunity to vote in such referendum was given (and 
was limited) to eligible employees ; 

(C) Not less than ninety days' notice of such referendum was 
given to all such employees ; 

(D) Such referendum was conducted under the supervision of 
the governor or an agency or individual designated by him; 
and 

(E) A majority of the eligible employees voted in favor of 
including service in such positions under an agreement under this 
section. 

An employee shall be deemed an "eligible employee" for purposes of 
any referendum with respect to any retirement system if, at the time 
such referendum was held, he was in a position covered by such retire- 
ment system and was a member of such system, and if he was in such 
a position at the time notice of such referendam was given as required 



159 



Sec. 218(d) 



by clause (C) of the preceding sentence; except that he shall not be 
deemed an "eligible employee" if, at the time the referendum was held, 
he was in a position to which the State agreement already applied, 
or if he was in a position excluded by or pursuant to paragraph (5). 
No referendum with respect to a retirement system shall be valid for 
purposes of this paragraph unless held within the two-year period 
which ends on the date of execution of the agreement or modification 
which extends the insurance system established by this title to such 
retirement system, nor shall any referendum with respect to a retire- 
ment system be valid for purposes of this paragraph if held less than 
one year after the last previous referendum held with respect to such 
retirement system. 

(4) For the purposes of subsection (c) of this section, the following 
employees shall be deemed to be a separate coverage group — 

(A) all employees in positions which were covered by the same 
retirement system on the date the agreement was made applicable 
to such system (other than employees to whose services the agree- 
ment already applied on such date) ; 

(B) all employees in positions which became covered by such 
system at any time after such date ; and 

(C) all employees in positions which were covered by such 
system at any time before such date and to whose services the 
insurance system established by this title has not been extended 
before such date because the positions were covered by such retire- 
ment system (including employees to whose services the agree- 
ment was not applicable on such date because such services were 
excluded pursuant to subsection (c) (3) (B) ). 

(5) (A) Nothing in paragraph (3) of this subsection shall author- 
ize the extension of the insurance system established by this title to 
service in any policeman's or fireman's position. 1 

(B) At the request of the State, any class or classes of positions 
covered by a retirement system which may be excluded from the agree- 
ment pursuant to paragraph (3) or (5) of subsection (c), and to 
which the agreement does not already apply, may be excluded from 
the agreement at the time it is made applicable to such retirement sys- 
tem; except that, notwithstanding the provisions of paragraph (3) 
(B) of such subsection, such exclusion may not include any services 
to which such paragraph (3) (B) is applicable. In the case of any such 
exclusion, each such class so excluded shall, for purposes of this sub- 
section, constitute a separate retirement system in case of any modifi- 
cation of the agreement thereafter agreed to. 

(6) (A) If a retirement system covers positions of employees of 
the State and positions of employees of one or more political subdivi- 



1 However, see sec. 218 (k) (3) and sec. 218 (p^ of this title. 



Sec. 218(d) 



160 



sions of the State, or covers positions of employees of two or more 
political subdivisions of the State, then, for purposes of the preceding 
paragraphs of this subsection, there shall, if the State so desires, be 
deemed to be a separate retirement system with respect to any one 
or more of the political subdivisions concerned and, where the retire- 
ment system covers positions of employees of the State, a separate 
retirement system with respect to the State or with respect to the State 
and any one or more of the political subdivisions concerned. Where 
a retirement system covering positions of employees of a State and 
positions of employees of one or more political subdivisions of a State, 
or covering positions of employees of two or more political subdivi- 
sions of the State, is not divided into separate retirement systems pur- 
suant to the preceding sentence or pursuant to subparagraph (C), 
then the State may, for purposes of subsection (f) only, deem the 
system to be a separate retirement system with respect to any one or 
more of the political subdivisions concerned and, where the retirement 
system covers positions of employees of the State, a separate retire- 
ment system with respect to the State or with respect to the State and 
any one or more of the political subdivisions concerned. 

(B) If a retirement system covers positions of employees of one or 
more institutions of higher learning, then, for purposes of such pre- 
ceding paragraphs there shall, if the State so desires, be deemed to be 
a separate retirement system for the employees of each such institution 
of higher learning. For the purposes of this subparagraph, the term 
"institutions of higher learning" includes junior colleges and teachers 
colleges. If a retirement system covers positions of employees of a 
hospital which is an integral part of a political subdivision, then, for 
purposes of the preceding paragraphs there shall, if the State so 
desires, be deemed to be a separate retirement system for the employees 
of such hospital. 

(C) For the purposes of this subsection, any retirement system 
established by the State of Alaska, California, Connecticut, Florida, 
Georgia, Illinois, Massachusetts, Minnesota, Nevada, New Mexico, 
New York, North Dakota, Pennsylvania, Rhode Island, Tennessee, 
Texas, Vermont, V/ashington, Wisconsin, or Hawaii, or any political 
subdivision of any such State, which, on, before, or after the date of 
enactment of this subparagraph, is divided into two divisions or parts, 
one of which is composed of positions of members of such system who 
desire coverage under an agreement under this section and the other 
of which is composed of positions of members of such system who do 
not desire such coverage, shall, if the State so desires and if it is pro- 
vided that there shall be included in such division or part composed 
of members desiring such coverage the positions of individuals who 
become members of such system after such coverage is extended, be 



161 



Sec. 218(d) 



deemed to be a separate retirement system with respect to each such 
division or part. If, in the case of a separate retirement system which 
is deemed to exist by reason of subparagraph (A) and which has been 
divided into two divisions or parts pursuant to the first sentence of 
this subparagraph, individuals become members of such system by rea- 
son of action taken by a political subdivision after coverage under an 
agreement under this section has been extended to the division or part 
thereof composed of positions of individuals who desire such cover- 
age, the positions of such individuals who become members of such 
retirement system by reason of the action so taken shall be included 
in the division or part of such system composed of positions of mem- 
bers who do not desire such coverage if (i) such individuals, on the 
day before becoming such members, were in the division or part of an- 
other separate retirement system (deemed to exist by reason of sub- 
paragraph ( A) ) composed of positions of members of such system who 
do not desire coverage under an agreement under this section, and (ii) 
all of the positions in the separate retirement system of which such in- 
dividuals so become members and all of the positions in the separate 
retirement system referred to in clause (i) would have been covered 
by a single retirement system if the State had not taken action to pro- 
vide for separate retirement systems under this paragraph. 

(D) (i) the position of any individual which is covered by any re- 
tirement system to which subparagraph (C) is applicable shall, if such 
individual is ineligible to become a member of such system on Au- 
gust 1, 1956, or, if later, the day he first occupies such position, be 
deemed to be covered by the separate retirement system consisting of 
the positions of members of the division or part who do not desire 
coverage under the insurance system established under this title. 

(ii) Notwithstanding clause (i), the State may, pursuant to sub- 
section (c) (4) (B) and subject to the conditions of continuation or 
termination of coverage provided for in subsection (c) (7), modify its 
agreement under this section to include services performed by all 
individuals described in clause (i) other than those individuals to 
whose services the agreement already applies. Such individuals shall 
be deemed (on and after the effective date of the modification) to be 
in positions covered by the separate retirement system consisting of 
the positions of members of the division or part who desire coverage 
under the insurance system established under this title. 

(E) An individual who is in a position covered by a retirement 
system to which subparagraph (C) is applicable and who is not a 
member of such system but is eligible to become a member thereof 
shall, for purposes of this subsection (other than paragraph (8) ), be 
regarded as a member of such system; except that, in the case of 
any retirement system a division or part of which is covered under 



Sec. 218(d) 162 

the agreement (either in the original agreement or by a modification 
thereof), which coverage is agreed to prior to 1960, the preceding 
provisions of this subparagraph shall apply only if the State so re- 
quests and any such individual referred to in such preceding provi- 
sions shall, if the State so requests, be treated, after division of the 
retirement system pursuant to such subparagraph (C), the same as 
individuals in positions referred to in subparagraph (F). 

(F) In the case of any retirement system divided pursuant to sub- 
paragraph (C), the position of any member of the division or part 
composed of positions of members who do not desire coverage may be 
transferred to the separate retirement system composed of positions 
of members who desire such coverage if it is so provided in a modi- 
fication of such agreement which is mailed, or delivered by other 
means, to the Secretary prior to 1970 or, if later, the expiration of 
two years after the date on which such agreement, or the modification 
thereof making the agreement applicable to such separate retirement 
system, as the case may be, is agreed to, but only if, prior to such 
modification or such later modification, as the case may be, the in- 
dividual occupying such position files with the State a written request 
for such transfer. Notwithstanding subsection (f) (1), any such modi- 
fication or later modification, providing for the transfer of additional 
positions within a retirement system previously divided pursuant to 
subparagraph (C) to the separate retirement system composed of 
positions of members who desire coverage, shall be effective with 
respect to services performed after the same effective date as that 
which was specified in the case of such previous division. 

(G) For the purposes of this subsection, in the case of any retire- 
ment system of the State of Florida, Georgia, Minnesota, North 
Dakota, Pennsylvania, Washington, or Hawaii which covers positions 
of employees of such State who are compensated in whole or in part 
from grants made to such State under title III, there shall be deemed 
to be, if such State so desires, a separate retirement system with respect 
to any of the following: 

(i) the positions of such employees ; 

(ii) the positions of all employees of such State covered by such 
retirement system who are employed in the department of such 
State in which the employees referred to in clause (i) are em- 
ployed ; or 

(iii) employees of such State covered by such retirement sys- 
tem who are employed in such department of such State in posi- 
tions other than those referred to in clause (i). 

(7) The certification by the governor (or an official of the State 
designated by him for the purpose) required under paragraph (3) 
shall be deemed to have been made, in the case of a division or part 
(created under subparagraph (C) of paragraph (6) or the corre- 



163 



Sec. 218(e) 



sponding provision of prior law) consisting of the positions of mem- 
bers of a retirement system who desire coverage under the agreement 
under this section, if the governor (or the official so designated) certi- 
fies to the Secretary of Health, Education, and Welfare that — 

(A) an opportunity to vote by written ballot on the question of 
whether they wish to be covered under an agreement under this 
section was given to all individuals who were members of such 
system at the time the vote was held; 

(B) not less than ninety days' notice of such vote was given to 
all individuals who were members of such system on the date the 
notice was issued; 

(C) the vote was conducted under the supervision of the gover- 
nor or an agency or individual designated by him; and 

(D) such system was divided into two parts or divisions in 
accordance with the provisions of subparagraphs (C) and (D) 
of paragraph (6) or the corresponding provision of prior law. 

For purposes of this paragraph, an individual in a position to which 
the State agreement already applied or in a position excluded by or 
pursuant to paragraph (5) shall not be considered a member of the 
retirement system. 

(8) (A) Notwithstanding paragraph (1), if under the provisions of 
this subsection an agreement is, after December 31, 1958, made appli- 
cable to service performed in positions covered by a retirement system, 
service performed by an individual in a position covered by such a 
system may not be excluded from the agreement because such position 
is also covered under another retirement system. 

(B) Subparagraph (A) shall not apply to service performed by an 
individual in a position covered under a retirement system if such 
individual, on the day the agreement is made applicable to service 
performed in positions covered by such retirement system, is not a 
member of such system and is a member of another system. 

(C) If an agreement is made applicable, prior to 1959, to service in 
positions covered by any retirement system, the preceding provisions 
of this paragraph shall be applicable in the case of such system if the 
agreement is modified to so provide. 

(D) Except in the case of agreements with the States named in sub- 
section (p) and agreements with interstate instrumentalities, nothing 
in this paragraph shall authorize the application of an agreement to 
service in any policeman's or fireman's position. 

Payments and Reports by States 

(e) (1) Each agreement under this section shall provide — 

(A) that the State will pay to the Secretary of the Treasury, 
at such time or times as the Secretary of Health, Education, and 
Welfare may by regulations prescribe, amounts equivalent to the 



Sec. 218(f) 



164 



sum of the taxes which would be imposed by sections 3101 and 
3111 of the Internal Revenue Code of 1954 if the services of em- 
ployees covered by the agreement constituted employment as de- 
fined in section 3121 of such code; and 

(B) that the State will comply with such regulations relating 
to payments and reports as the Secretary of Health, Education, 
and Welfare may prescribe to carry out the purposes of this 
section. 1 
(2) Where— 

(A) an individual in any calendar year performs services to 
which an agreement under this section is applicable (i) as the 
employee of two or more political subdivisions of a State or 
(ii) as the employee of a State and one or more political sub- 
divisions of such State; and 

(B) such State provides all of the funds for the payment of 
those amounts referred to in paragraph (1) (A) which are equiv- 
alent to the taxes imposed by section 3111 of the Internal Revenue 
Code of 1954 with respect to wages paid to such individual for 
such services; and 

(C) the political subdivision or subdivisions involved do not 
reimburse such State for the payment of such amounts or, in the 
case of services described in subparagraph (A) (ii), for the pay- 
ment of so much of such amounts as is attributable to employ- 
ment by such subdivision or subdivisions ; 

then, notwithstanding paragraph (1), the agreement under this sec- 
tion with such State may provide (either in the original agreement 
or by a modification thereof) that the amounts referred to in para- 
graph (1)(A) may be computed as though the wages paid to such 
individual for the services referred to in clause (A) of this paragraph 
were paid by one political subdivision for services performed in its 
employ ; but the provisions of this paragraph shall be applicable only 
where such State complies with such regulations as the Secretary 
may prescribe to carry out the purposes of this paragraph. The pre- 
ceding sentence shall be applicable with respect to wages paid after 
an effective date specified in such agreement or modification, but in 
no event with respect to wages paid before (i) January 1, 1957, in 
the case of an agreement or modification which is mailed or delivered 
by other means to the Secretary before January 1, 1962, or (ii) the 
first day of the year in which the agreement or modification is mailed 
or delivered by other means to the Secretary, in the case of an agree- 
ment or modification which is so mailed or delivered on or after 
January 1, 1962. 

Effective Date of Agreement 

(f ) (1) Except as provided in subsection (e) (2), any agreement or 
modification of an agreement under this section shall be effective with 



1 See section 7 of Public Law 94-202 (p. 743 of this document). 



165 



Sec. 218(g) 



respect to services performed after an effective date specified in such 
agreement or modification; except that such date may not be earlier 
than the last day of the sixth calendar year preceding the year in 
which such agreement or modification, as the case may be, is agreed 
to by the Secretary and the State. 

(2) In the case of service performed by members of any coverage 
group — 

(A) to which an agreement under this section is made applica- 
ble, and 

(B) with respect to which the agreement, or modification there- 
of making the agreement so applicable, specifies an effective date 
earlier than the date of execution of such agreement and such 
modification, respectively, 

the agreement shall, if so requested by the State, be applicable to such 
services (to the extent the agreement was not already applicable) 
performed before such date of execution and after such effective date 
by any individual as a member of such coverage group if he is such a 
member on a date, specified by the State, which is earlier than such 
date of execution, except that in no case may the date so specified be 
earlier than the date such agreement or such modification, as the case 
may be, is mailed, or delivered by other means, to the Secretary. 

(3) Notwithstanding the provisions of paragraph (2) of this sub- 
section, in the case of services performed by individuals as members 
of any coverage group to which an agreement under this section is 
made applicable, and with respect to which there were timely paid 
in good faith to the Secretary of the Treasury amounts equivalent to 
the sum of the taxes which would have been imposed by sections 3101 
and 3111 of the Internal Revenue Code of 1954 had such services 
constituted employment for purposes of chapter 21 of such Code at 
the time they were performed, and with respect to which refunds were 
not obtained, such individuals may, if so requested by the State, be 
deemed to be members of such coverage group on the date designated 
pursuant to paragraph (2). 

Termination of Agreement 

(g) (1) Upon giving at least two years' advance notice in writing 
to the Secretary of Health, Education, and Welfare, a State may ter- 
minate, effective at the end of a calendar quarter specified in the 
notice, its agreement with the Secretary either — 

(A) in its entirety but only if the agreement has been in effect 
from its effective date for not less than five years prior to the 
receipt of such notice ; or 

(B) with respect to any coverage group designated by the 
State, but only if the agreement has been in effect with respect to 



Sec. 218(h) 



166 



such coverage group for not less than five years prior to the 
receipt of such notice. 

(2) If the Secretary, after reasonable notice and opportunity for 
hearing to a State with whom he has entered into an agreement pur- 
suant to this section, finds that the State has failed or is no longer 
legally able to comply substantially with any provision of such agree- 
ment or of this section, he shall notify such State that the agreement 
will be terminated in its entirety, or with respect to any one or more 
coverage groups designated by him, at such time, not later than two 
years from the date of such notice, as he deems appropriate, unless 
prior to such time he finds that there no longer is any such failure 
or that the cause for such legal inability has been removed. 

(3) If any agreement entered into under this section is terminated 
in its entirety, the Secretary and the State may not again enter into 
an agreement pursuant to this section. If any such agreement is termi- 
nated with respect to any coverage group, the Secretary and the State 
may not thereafter modify such agreement so as to again make the 
agreement applicable with respect to such coverage group. 

Deposits in Trust Funds; Adjustments 

(h) (1) All amounts received by the Secretary of the Treasury under 
an agreement made pursuant to this section shall be deposited in the 
Trust Funds and the Federal Hospital Insurance Trust Fund in the 
ratio in which amounts are appropriated to such Funds pursuant to 
subsection (a) (3) of section 201, subsection (b) (1) of such section, 
and subsection (a) (1) of section 1817, respectively. 

(2) If more or less than the correct amount due under an agreement 
made pursuant to this section is paid with respect to any payment of 
remuneration, proper adjustments with respect to the amounts due 
under such agreement shall be made, without interest, in such manner 
and at such times as may be prescribed by regulations of the Secretary 
of Health, Education, and Welfare. 

(3) If an overpayment cannot be adjusted under paragraph (2), 
the amount thereof and the time or times it is to be paid shall be certi- 
fied by the Secretary of Health, Education, and Welfare to the Man- 
aging Trustee, and the Managing Trustee, through the Fiscal Service 
of the Treasury Department and prior to any action thereon by the 
General Accounting Office, shall make payment in accordance with 
such certification. The Managing Trustee shall not be held personally 
liable for any payment or payments made in accordance with a certifi- 
cation by the Secretary of Health, Education, and Welfare. 

Regulations 

(i) Regulations of the Secretary of Health, Education, and Welfare 
to carry out the purposes of this section shall be designed to make the 



167 



Sec. 218(k) 



requirements imposed on States pursuant to this section the same, so 
far as practicable, as those imposed on employers pursuant to this title 
and chapter 21 and subtitle F of the Internal Revenue Code of 1954. 1 

Failure to Make Payments 

(j) In case any State does not make, at the time or times due, the 
payments provided for under an agreement pursuant to this section 
there shall be added, as part of the amounts due, interest at the rate of 
6 per centum per annum from the date due until paid, and the Secre- 
tary of Health, Education, and Welfare may, in his discretion, deduct 
such amounts plus interest from any amounts certified by him to the 
Secretary of the Treasury for payment to such State under any other 
provision of this Act. Amounts so deducted shall be deemed to have 
been paid to the State under such other provision of this Act. Amounts 
equal to the amounts deducted under this subsection are hereby appro- 
priated to the Trust Funds in the ratio in which amounts are deposited 
in such Funds pursuant to subsection (h) (1) . 

Instrumentalities of Two or More States 

(k) (1) The Secretary of Health, Education, and Welfare may, at 
the request of any instrumentality of two or more States, enter into 
an agreement with such instrumentality for the purpose of extending 
the insurance system established by this title to services performed by 
individuals as employees of such instrumentality. Such agreement, to 
the extent practicable, shall be governed by the provisions of this sec- 
tion applicable in the case of an agreement with a State. 

(2) In the case of any instrumentality of two or more States, if — 

(A) employees of such instrumentality are in positions covered 
by a retirement system of such instrumentality or of any of such 
States or any of the political subdivisions thereof, and 

(B) such retirement system is (on, before, or after the date of 
enactment of this paragraph) divided into two divisions or parts, 
one of which is composed of positions of members of such system 
who are employees of such instrumentality and who desire cover- 
age under an agreement under this section and the other of which 
is composed of positions of members of such system who are em- 
ployees of such instrumentality and who do not desire such cover- 
age, and 

(C) it is provided that there shall be included in such division 
or part composed of the positions of members desiring such cov- 
erage the positions of employees of such instrumentality who be- 
come members of such system after such coverage is extended, 

then such retirement system shall, if such instrumentality so desires, 
be deemed to be a separate retirement system with respect to each such 



1 Sections 7 and 8(k) of Public Law 94-202 place certain limits on the discretion of 
the Secretary of Health, Education, and Welfare to issue regulations under this sub- 
section. These provisions appear in this document on pages 743-744. 



Sec. 218(1) 



168 



division or part. An individual who is in a position covered by a 
retirement system divided pursuant to the preceding sentence and 
who is not a member of such system but is eligible to become a member 
thereof shall, for purposes of this subsection, be regarded as a member 
of such system. Coverage under the agreement of any such individual 
shall be provided under the same conditions, to the extent prac- 
ticable, as are applicable in the case of the States to which the pro- 
visions of subsection (d) (6) (C) apply. The position of any employee 
of any such instrumentality which is covered by any retirement 
system to which the first sentence of this paragraph is applicable 
shall, if such individual is ineligible to become a member of such 
system on the date of enactment of this paragraph or, if later, the 
day he first occupies such position, be deemed to be covered by the 
separate retirement system consisting of the positions of members of 
the division or part who do not desire coverage under the insurance 
system established under this title. Services in positions covered by 
a separate retirement system created pursuant to this subsection (and 
consisting of the positions of members who desire coverage under an 
agreement under this section) shall be covered under such agreement 
on compliance, to the extent practicable, with the same conditions as 
are applicable to coverage under an agreement under this section of 
services in positions covered by a separate retirement system created 
pursuant to subparagraph (C) of subsection (d) (6) or the corre- 
sponding provision of prior law (and consisting of the positions of 
members who desire coverage under such agreement) . 

(3) Any agreement with any instrumentality of two or more States 
entered into pursuant to this Act may, notwithstanding the provisions 
of subsection (d)(5)(A) and the references thereto in subsections 
(d) (1) and (d) (3), apply to service performed by employees of such 
instrumentality in any policeman's or fireman's position covered by 
a retirement system, but only upon compliance, to the extent prac- 
ticable, with the requirements of subsection (d) (3). For the purpose 
of the preceding sentence, a retirement system which covers positions 
of policemen or firemen or both, and other positions shall, if the in- 
strumentality concerned so desires, be deemed to be a separate retire- 
ment system with respect to the positions of such policemen or firemen, 
or both, as the case may be. 

Delegation of Functions 

(1) The Secretary of Health, Education, and Welfare is authorized 
pursuant to agreement with the head of any Federal agency, to dele- 
gate any of his functions under this section to any officer or employee 
of such agency and otherwise to utilize the services and facilities 
of such agency in carrying out such functions, and payment therefor 



169 



Sec. 218(o) 



shall be in advance or by way of reimbursement, as may be provided 
in such agreement. 

Wisconsin Retirement Fund 

(m)(l) Notwithstanding paragraph (1) of subsection (d), the 
agreement with the State of Wisconsin may, subject to the provisions 
of this subsection, be modified so as to apply to service performed by 
employees in positions covered by the Wisconsin retirement fund. 

(2) All employees in positions covered by the Wisconsin retirement 
fund at any time on or after January 1, 1951, shall, for the purposes 
of subsection (c) only, be deemed to be a separate coverage group ; ex- 
cept that there shall be excluded from such separate coverage group 
all employees in positions to which the agreement applies without re- 
gard to this subsection. 

(3) The modification pursuant to this subsection shall exclude (in 
the case of employees in the coverage group established by paragraph 

(2) of this subsection) service performed by any individual during 
any period before he is included under the Wisconsin retirement fund. 

(4) The modification pursuant to this subsection shall, if the State 
of Wisconsin requests it, exclude (in the case of employees in the 
coverage group established by paragraph (2) of this subsection) all 
service performed in policemen's positions, all service performed in 
firemen's positions, or both. 

Certain Positions No Longer Covered by Retirement Systems 

(n) Notwithstanding subsection (d), an agreement with any State 
entered into under this section prior to the date of the enactment of 
this subsection may, prior to January 1, 1958, be modified pursuant 
to subsection (c)(4) so as to apply to services performed by employees, 
as members of any coverage group to which such agreement already 
applies (and to which such agreement applied on such date of enact- 
ment), in positions (1) to which such agreement does not already 
apply, (2) which were covered by a retirement system on the date 
such agreement was made applicable to such coverage group, and 

(3) which, by reason of action by such State or political subdivision 
thereof, as may be appropriate, taken prior to the date of the enact- 
ment of this subsection, are no longer covered by a retirement system 
on the date such agreement is made applicable to such services. 

Certain Employees of the State of Utah 

(o) Notwithstanding the provisions of subsection (d), the agree- 
ment with the State of Utah entered into pursuant to this section may 
be modified pursuant to subsection (c) (4) so as to apply to services 
performed for any of the following, the employees performing serv- 
ices for each of which shall constitute a separate coverage group : 



64-310 O - 76 - 12 



Sec. 218(p) 



170 



Weber Junior College, Carbon Junior College, Dixie Junior College, 
Central Utah Vocational School, Salt Lake Area Vocational School, 
Center for the Adult Blind, Union High School (Roosevelt, Utah), 
Utah High School Activities Association, State Industrial School, 
State Training School, State Board of Education, and Utah School 
Employees Retirement Board. Any modification agreed to prior to 
January 1, 1955, may be made effective with respect to services per- 
formed by employees as members of any of such coverage groups 
after an effective date specified therein, except that in no case may 
any such date be earlier than December 31, 1950. 

Policemen and Firemen in Certain States 

(p) (1) Any agreement with the State of Alabama, California, 
Florida, Georgia, Hawaii, Idaho, Kansas, Maine. Maryland, Montana, 
Xew York, North Carolina, North Dakota, Oregon, Puerto Rico, South 
Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, or 
Washington entered into pursuant to this section prior to the date of 
enactment of this subsection may, notwithstanding the provisions of 
subsection (d) (5) (A) and the references thereto in subsections (d) (1) 
and (d)(3), be modified pursuant to subsection (c)(4) to apply to 
service performed by employees of such State or any political subdi- 
vision thereof in any policeman's or fireman's position covered by a 
retirement system in effect on or after the date of the enactment of 
this subsection, but only upon compliance with the requirements of 
subsection (d)(3). For the purposes of the preceding sentence, a 
retirement system which covers positions of policemen or firemen, or 
both, and other positions shall, if the State concerned so desires, be 
deemed to be a separate retirement system with respect to the positions 
of such policemen or firemen, or both, as the case may be. 

(2) A State, not otherwise listed by name in paragraph (1), shall 
be deemed to be a State listed in such paragraph for the purpose of 
extending coverage under this title to service in firemen's positions 
covered by a retirement system, if the Governor of the State, or an 
official of the State designated by him for the purpose, certifies to 
the Secretary of Health, Education, and Welfare that the overall bene- 
fit protection of the employees in such positions would be improved by 
reason of the extension of such coverage to such employees. Notwith- 
standing the provisions of the second sentence of such paragraph (1), 
such firemen's positions shall be deemed a separate retirement system 
and no other positions shall be included in such system. 1 

iP.L. 90-248, sec. 120(a)(2). added paragraph (2) applicable in the case of any State 
with respect to modifications of such Scare agreement under section 218 of the Social 
Security Act made after January 2, 1968. Section 120(b) of the Social Security Amend- 
ments of 1967 provides : "Nothing in the amendments made by subsection (a) shall 
authorize the extension of the insurance system established by title II of the Social Se- 
curity Act under the provisions of section 218(d)(6)(C) of such Act to service in any 
fireman's position." 



171 



Sec. 218(q) 



Time Limitation on Assessments 

(q) (1) Where a State is liable for an amount due under an agree- 
ment pursuant to this section, such State shall remain so liable until 
the Secretary is satisfied that the amount due has been paid to the 
Secretary of the Treasury. 

(2) Notwithstanding paragraph (1), a State shall not be liable for 
an amount due under an agreement pursuant to this section, with re- 
spect to the wages paid to individuals, after the expiration of the latest 
of the following periods — 

(A) three years, three months, and fifteen days after the year 
in which such wages were paid, or 

(B) three years after the date on which such amount became 
due, or 

(C) three years, three months, and fifteen days after the year 
following the year in which this subsection is enacted, 

unless prior to the expiration of such period the Secretary makes an 
assessment of the amount due. 

(3) For purposes of this subsection and section 205(c), an assess- 
ment of an amount due is made when the Secretary mails or otherwise 
delivers to the State a notice stating the amount he has determined to 
be due under an agreement pursuant to this section and the basis for 
such determination. 

(4) An assessment of an amount due made by the Secretary after 
the expiration of the period specified in paragraph (2) shall never- 
theless be deemed to have been made within such period if — 

(A) before the expiration of such period (or, if it has pre- 
viously been extended under this paragraph, of such period as so 
extended), the State and the Secretary agree in writing to an ex- 
tension of such period (or extended period) and, subject to such 
conditions as may be agreed upon, the Secretary makes the assess- 
ment prior to the expiration of such extension ; or 

(B) within the 365 days immediately preceding the expiration 
of such period (or extended period) the State pays to the Secre- 
tary of the Treasury less than the correct amount due under an 
agreement pursuant to this section with respect to wages paid to 
individuals in any calendar quarters as members of a coverage 
group, and the Secretary of Health, Education, and Welfare 
makes the assessment, adjusted to take into account the amount 
paid by the State, no later than the 365th day after the day the 
State made payment to the Secretary of the Treasury; but the 
Secretary of Health, Education, and Welfare, shall make such 
assessment only with respect to the wages paid to such individ- 
uals in such calendar quarters as members of such coverage 
group ; or 



Sec. 218(q) 



172 



(C) pursuant to subparagraph (A) or (B) of section 205(c) (5) 
he includes in his records an entry with respect to wages for an 
individual, but only if such assessment is limited to the amount 
due with respect to such wages and is made within the period such 
entry could be made in such records under such subparagraph. 

(5) If the Secretary allows a claim for a credit or refund of an 
overpayment by a State under an agreement pursuant to this section, 
with respect to wages paid or alleged to have been paid to an indi- 
vidual in a calendar year for services as a member of a coverage 
group, and if as a result of the facts on which such allowance is 
based there is an amount due from the State, with respect to wages 
paid to such individual in such calendar year for services performed 
as a member of a coverage group, for which amount the State is not 
liable by reason of paragraph (2) then notwithstanding paragraph 
(2) the State shall be liable for such amount due if the Secretary 
makes an assessment of such amount due at the time of or prior to 
notification to the State of the allowance of such claim. For pur- 
poses of this paragraph and paragraph (6), interest as provided for 
in subsection (j) shall not be included in determining the amount due. 

(6) The Secretary shall accept wage reports filed by a State under 
an agreement pursuant to this section or regulations of the Secretary 
thereunder, after the expiration of the period specified in paragraph 
(2) or such period as extended pursuant to paragraph (4), with 
respect to wages which are paid to individuals performing services 
as employees in a coverage group included in the agreement and for 
payment in connection with which the State is not liable by reasons 
of paragraph (2) , only if the State — 

(A) pays to the Secretary of the Treasury the amount due 
under such agreement with respect to such wages, and 

(B) agrees in writing with the Secretary of Health, Education, 
and Welfare to an extension of the period specified in paragraph 
(2) with respect to wages paid to all individuals performing 
services as employees in such coverage group in the calendar 
quarters designated by the State in such wage reports as the 
periods in which such wages were paid. If the State so agrees, 
the period specified in paragraph (2), or such period as extended 
pursuant to paragraph (4), shall be extended until such time as 
the Secretary notifies the State that such wage reports have been 
accepted. 

(7) Notwithstanding the preceding provisions of this subsection, 
where there is an amount due by a State under an agreement pur- 
suant to this section and there has been a fraudulent attempt on the 
part of an officer or employee of the State or any political subdivision 
thereof to defeat or evade payment of such amount due, the State shall 
be liable for such amount due without regard to the provisions of 



173 



Sec. 218(s) 



paragraph (2), and the Secretary may make an assessment of such 
amount due at any time. 

Time Limitations on Credits and Refunds 

(r) (1) No credit or refund of an overpayment by a State under 
an agreement pursuant to this section with respect to wages paid or 
alleged to have been paid to an individual as a member of a coverage 
group in a calendar quarter shall be allowed after the expiration of 
the latest of the following periods — 

(A) three years, three months, and fifteen days after the year 
in which occurred the calendar quarter in which such wages were 
paid or alleged to have been paid, or 

(B) three years after the date the payment which included 
such overpayment became due under such agreement with respect 
to the wages paid or alleged to have been paid to such individual 
as a member of such coverage group in such calendar quarter, or 

(C) two years after such overpayment was made to the Secre- 
tary of the Treasury, or 

(D) three years, three months, and fifteen days after the year 
following the year in which this subsection is enacted, 

unless prior to the expiration of such period a claim for such credit 
or refund is filed with the Secretary of Health, Education, and Wel- 
fare by the State. 

(2) A claim for a credit or refund filed by a State after the ex- 
piration of the period specified by paragraph (1) shall nevertheless 
be deemed to have been filed within such period if — 

(A) before the expiration of such period (or, if it has previ- 
ously been extended under this subparagraph, of such period as 
so extended) the State and the Secretary agreed in writing to an 
extension of such period (or extended period) and the claim is 
filed with the Secretary by the State prior to the expiration of 
such extension; but any claim for a credit or refund valid be- 
cause of this subparagraph shall be allowed only to the extent 
authorized by the conditions provided for in the agreement for 
such extension, or 

(B) the Secretary deletes from his records an entry with re- 
spect to wages of an individual pursuant to the provisions of sub- 
paragraph (A), (B),or (E) of section 205(c) (5), but only with 
respect to the entry so deleted. 

Review by Secretary 

(s) Where the Secretary has made an assessment of an amount due 
by a State under an agreement pursuant to this section, disallowed a 
State's claim for a credit or refund of an overpayment under such 



Sec. 218(t) 



174 



agreement, or allowed a State a credit or refund of an overpayment 
under such agreement, he shall review such assessment, disallowance, 
or allowance if a written request for such review is filed with him by 
the State within 90 days (or within such further time as he may allow) 
after notification to the State of such assessment, disallowance, or 
allowance. On the basis of the evidence obtained by or submitted to 
the Secretary, he shall render a decision affirming, modifying, or re- 
versing such assessment, disallowance, or allowance. In notifying the 
State of his decision, the Secretary shall state the basis therefor. 

Review By Court 

(t) (1) Notwithstanding any other provision of this title any State, 
irrespective of the amount in controversy, may file, within two years 
after the mailing to such State of the notice of any decision by the 
Secretary pursuant to subsection (s) affecting such State, or within 
such further time as the Secretary may allow, a civil action for a re- 
determination of the correctness of the assessment of the amount due, 
the disallowance of the claim for a refund or credit, or the allowance 
of the refund or credit, as the case may be, with respect to which the 
Secretary has rendered such decision. Such action shall be brought in 
the district court of the United States for the judicial district in which 
is located the capital of such State, or, if such action is brought by an 
instrumentality of two or more States, the principal office of such in- 
strumentality. The judgment of the court shall be final, except that 
it shall be subject to review in the same manner as judgments of such 
court in other civil actions. Any action filed under this subsection 
shall survive notwithstanding any change in the person occupying the 
office of Secretary or any vacancy in such office. 

(2) Notwithstanding the provisions of section 2411 of title 28, 
United States Code, no interest shall accrue to a State after final 
judgment with respect to a credit or refund of an overpayment made 
under an agreement pursuant to this section. 

(3) The first sentence of section 2414 of title 28, United States Code, 
shall not apply to final judgments rendered by district courts of the 
United States in civil actions filed under this subsection. In such cases, 
the payment of amounts due to States pursuant to such final judg- 
ments shall be adjusted in accordance with the provisions of this sec- 
tion and with regulations promulgated by the Secretary. 

Positions Compensated Solely on a Fee Basis 

(u) (1) Notwithstanding any other provision in this section, an 
agreement entered into under this section may be made applicable to 
service performed after 1967 in any class or classes of positions com- 
pensated solely on a fee basis to which such agreement did not apply 



175 



Sec. 221(a) 



prior to 1968 only if the State specifically requests that its agreement 
be made applicable to such service in such class or classes of positions. 

(2) Notwithstanding any other provision in this section, an agree- 
ment entered into under this section may be modified, at the option of 
the State, at any time after 1967, so as to exclude services performed 
in any class or classes of positions compensation for which is solely 
on a fee basis. 

(3) Any modification made under this subsection shall be effective 
with respect to services performed after the last day of the calendar 
year in which the modification is agreed to by the Secretary and the 
State. 

(4) If any class or classes of positions have been excluded from 
coverage under the State agreement by a modification agreed to under 
this subsection, the Secretary and the State may not thereafter modify 
such agreement so as to again make the agreement applicable with 
respect to such class or classes of positions. 

Sec. 219. [Repealed.] 

Disability Provisions Inapplicable if Benefit Rights Impaired 

Sec. 220. None of the provisions of this title relating to periods of 
disability shall apply in any case in which their application would 
result in the denial of monthly benefits or a lump-sum death payment 
which would otherwise be payable under this title; nor shall they 
apply in the case of any monthly benefit or lump-sum death payment 
under this title if such benefit or payment would be greater without 
their application. 

Disability Determinations 

Sec. 221. (a) In the case of any individual, the determination of 
whether or not he is under a disability (as defined in section 216 (i) 
or 223(d)) and of the day such disability began, and the determina- 
tion of the day on which such disability ceases, shall, except as pro- 
vided in subsection (g), be made by a State agency pursuant to an 
agreement entered into under subsection (b). Except as provided in 
subsection (c) and (d), any such determinations shall be the deter- 
mination of the Secretary for purposes of this title. 

(b) The Secretary shall enter into an agreement with each State 
which is willing to make such an agreement under which the State 
agency or agencies administering the State plan approved under the 
Vocational Rehabilitation Act, or any other appropriate State agency 
or agencies, or both, will make the determination referred to in sub- 
section (a) with respect to all individuals in such State, or with respect 
to such class or classes of individuals in the State as may be designated 
in the agreement at the State's request. 



Sec. 221(c) 



176 



(c) The Secretary may on his own motion review a determination, 
made by a State agency pursuant to an agreement under this section, 
that an individual is under a disability (as defined in section 216 (i) 
or 223(d)) and, as a result of such review, may determine that such 
individual is not under a disability (as so defined) or that such dis- 
ability began on a day later than that determined by such agency, or 
that such disability ceased on a day earlier than that determined by 
such agency. 

(d) Any individual dissatisfied with any determination under sub- 
section (a), (c), or (g) shall be entitled to a hearing thereon by the 
Secretary to the same extent as is provided in section 205(b) with 
respect to decisions of the Secretary, and to judicial review of the 
Secretary's final decision after such hearing as is provided in section 
205(g). 

(e) Each State which has an agreement with the Secretary under 
this section shall be entitled to receive from the Trust Funds, in ad- 
vance or by way of reimbursement, as may be mutually agreed upon, 
the cost to the State of carrying out the agreement under this section. 
The Secretary shall from time to time certify such amount as is neces- 
sary for this purpose to the Managing Trustee, reduced or increased, 
as the case may be, by any sum (for which adjustment hereunder has 
not previously been made) by which the amount certified for any prior 
period was greater or less than the amount which should have been 
paid to the State under this subsection for such period ; and the Man- 
aging Trustee, prior to audit or settlement by the General Accounting 
Office, shall make payment from the Trust Funds at the time or times 
fixed by the Secretary, in accordance with such certification. Ap- 
propriate adjustments between the Federal Old- Age and Survivors 
Insurance Trust Fund and the Federal Disability Insurance Trust 
Fund with respect to the payments made under this subsection shall 
be made in accordance with paragraph (1) of subsection (g) of sec- 
tion 201 (but taking into account any refunds under subsection (f ) of 
this section) to insure that the Federal Disability Trust Fund is 
charged with all expenses incurred which are attributable to the ad- 
ministration of section 223 and the Federal Old-Age and Survivors 
Insurance Trust Fund is charged with all other expenses. 

(f ) All money paid to a State under this section shall be used solely 
for the purposes for which it is paid; and any money so paid which 
is not used for such purposes shall be returned to the Treasury of the 
United States for deposit in the Trust Funds. 

(g) In the case of individuals in a State which has no agreement 
under subsection (b), in the case of individuals outside the United 
States, and in the case of any class or classes of individuals not in- 
cluded in an agreement under subsection (b), the determinations re- 



177 



Sec. 222(b) 



f erred to in subsection (a) shall be made by the Secretary in accord- 
ance with regulations prescribed by him. 

Rehabilitation Services 

Referral for Rehabilitation Services 

Sec. 222. (a) It is hereby declared to be the policy of the Congress 
that disabled individuals applying for a determination of disability, 
and disabled individuals who are entitled to child's insurance benefits, 
widow's insurance benefits, or widower's insurance benefits, shall be 
promptly referred to the State agency or agencies administering or 
supervising the administration of the State plan approved under the 
Vocational Rehabilitation Act for necessary vocational rehabilitation 
services, to the end that the maximum number of such individuals may 
be rehabilitated into productive activity. 

Deductions on Account of Refusal To Accept Rehabilitation Services 

(b) (1) Deductions, in such amounts and at such time or times as the 
Secretary shall determine, shall be made from any payment or pay- 
ments under this title to which an individual is entitled, until the total 
of such deductions equals such individual's benefit or benefits under 
sections 202 and 223 for any month in which such individual, if a child 
who has attained the age of eighteen and is entitled to child's insurance 
benefits, a widow, widower or surviving divorced wife who has not 
attained age 60, or an individual entitled to disability insurance bene- 
fits, refuses without good cause to accept rehabilitation services avail- 
able to him under a State plan approved under the Vocational Re- 
habilitation Act. Any individual who is a member or adherent of 
any recognized church or religious sect which teaches its members or 
adherents to rely solely, in the treatment and cure of any physical or 
mental impairment, upon prayer or spiritual means through the appli- 
cation and use of the tenets or teachings of such church or sect, and 
who, solely because of his adherence to the teachings or tenets of such 
church, or sect, refuses to accept rehabilitation services available to 
him under a State plan approved under the Vocational Rehabilitation 
Act, shall, for the purposes of the first sentence of this subsection, be 
deemed to have done so with good cause. 

(2) Deductions shall be made from any child's insurance benefit to 
which a child who has attained the age of eighteen is entitled or from 
any mother's insurance benefit to which a person is entitled, until the 
total of such deductions equals such child's insurance benefit or benefits 
or such mother's insurance benefit or benefits under section 202 for any 
month in which such child or person entitled to mother's insurance 
benefits is married to an individual who is entitled to disability ansur- 



Sec. 222(c) 



178 



ance benefits and in which such individual refuses to accept rehabilita- 
tion services and a deduction, on account of such refusal, is imposed 
under paragraph (1). If both this paragraph and paragraph (3) are 
applicable to a child's insurance benefit for any month, only an amount 
equal to such benefit shall be deducted. 

(3) Deductions shall be made from any wife's, husband's, or child's 
insurance benefit, based on the wages and self-employment income of 
an individual entitled to disability insurance benefits, to which a wife, 
divorced wife, husband, or child is entitled, until the total of such 
deductions equal such wife's, husband's, or child's insurance benefit or 
benefits under section 202 for any month in which the individual, on 
the basis of whose wages and self -employment income such benefit was 
payable, refuses to accept rehabilitation services and deductions, on 
account of such refusal, are imposed under paragraph (1). 

(4) The provisions of paragraph (1) shall not apply to any child 
entitled to benefits under section 202(d) , if he has attained the age of 
18 but has not attained the age of 22, for any month during which he 
is a full-time student (as defined and determined under section 202 

(*))■ 

Period of Trial Work 

(c) (1) The term "period of trial work", with respect to an individ- 
ual entitled to benefits under section 223 or 202(d) , means a period of 
months beginning and ending as provided in paragraphs (3) and (4). 

(2) For purposes of sections 216 (i) and 223, any services rendered 
by an individual during a period of trial work shall be deemed not to 
have been rendered by such individual in determining whether his 
disability has ceased in a month during such period. For purposes of 
this subsection the term "services" means activity which is performed 
for remuneration or gain or is determined by the Secretary to be of a 
type normally performed for remuneration or gain. 

(3) A period of trial work for any individual shall begin with the 
month in which he becomes entitled to disability insurance benefits, 
or, in the case of an individual entitled to benefits under section 202(d) 
who has attained the age of eighteen, with the month in which he be- 
comes entitled to such benefits or the month in which he attains the age 
of eighteen, whichever is later. Notwithstanding the preceding sen- 
tence, no period of trial work may begin for any individual prior to 
the beginning of the month following the month in which this para- 
graph is enacted ; and no such period may begin for an individual in 
a period of disability of such individual in which he had a previous 
period of trial work. 

(4) A period of trial work for any individual shall end with the 
close of whichever of the following months is the earlier: 

(A) the ninth month, beginning on or after the first day of 
such period, in which the individual renders services (whether or 



179 



Sec. 222(d) 



not such nine months are consecutive) ; or 

(B) the month in which his disability (as denned in section 

223(d) ) ceases (as determined after application of paragraph (2) 

of this subsection). 
(5) In the case of an individual who becomes entitled to benefits 
under section 223 for any month as provided in clause (ii) of subsec- 
tion (a) (1) of such section, the preceding provisions of this subsec- 
tion shall not apply with respect to services in any month beginning 
with the first month for which he is so entitled and ending with the 
first month thereafter for which he is not entitled to benefits under 
section 223. 

Costs of Rehabilitation Services From Trust Funds 

(d) (1) For the purpose of making vocational rehabilitation services 
more readily available to disabled individuals who are — 

(A) entitled to disability insurance benefits under section 223, or 

(B) entitled to child's insurance benefits under section 202(d) 
after having attained age 18 (and are under a disability), or 

(C) entitled to widow's insurance benefits under section 202(e) 
prior to attaining age 60, or 

(D) entitled to widower's insurance benefits under section 202 
(f ) prior to attaining age 60, 

to the end that savings will result to the Trust Fund as a result of 
rehabilitating the maximum number of such individuals into produc- 
tive activity, there are authorized to be transferred from the Trust 
Funds such sums as may be necessary to enable the Secretary to pay 
the costs of vocational rehabilitation services for such individuals (in- 
cluding (i) services during their waiting periods, and (ii) so much of 
the expenditures for the administration of any State plan as is attrib- 
utable to carrying out this subsection) ; except that the total amount 
so made available pursuant to this subsection may not exceed — 

(i) 1 percent in the fiscal year ending June 30, 1972, 

(ii) 1.25 percent in the fiscal year ending June 30, 1973, 

(iii) 1.5 percent in the fiscal year ending June 30, 1974, and 
thereafter, 

of the total of the benefits under section 202(d) for children who 
have attained age 18 and are under a disability, the benefits under 
section 202(e) for widows and surviving divorced wives who have 
not attained age 60 and are under a disability, the benefits under 
section 202(f) for widowers who have not attained age 60, and the 
benefits under section 223, which were certified for payment in the 
preceding year. The selection of individuals (including the order 
in which they shall be selected) to receive such services shall be 
made in accordance with criteria formulated by the Secretary 



Sec. 222(d) 



180 



which are based upon the effect the provision of such services 
would have upon the Trust Funds. 

(2) In the case of each State which is willing to do so, such voca- 
tional rehabilitation services shall be furnished under a State plan 
for vocational rehabilitation services which — 

(A) has been approved under section 5 of the Vocational Re- 
habilitation Act, 

(B) provides that, to the extent funds provided under this 
subsection are adequate for the purpose, such services will be 
furnished, to any individual in the State who meets the criteria 
prescribed by the Secretary pursuant to paragraph (1), with rea- 
sonable promptness and in accordance with the order of selec- 
tion determined under such criteria, and 

(C) provides that such services will be furnished to any indi- 
vidual without regard to (i) his citizenship or place of residence, 
(ii) his need for financial assistance except as provided in regula- 
tions of the Secretary in the case of maintenance during rehabili- 
tation, or (iii) any order of selection which would otherwise be 
followed under the State plan pursuant to section 5(a)(4) of 
the Vocational Rehabilitation Act. 

(3) In the case of any State which does not have a plan which meets 
the requirements of paragraph (2), the Secretary may provide such 
services by agreement or contract with other public or private agencies, 
organizations, institutions, or individuals. 

(4) Payments under this subsection may be made in installments, 
and in advance or by way of reimbursement, with necessary adjust- 
ments on account of overpayments or underpayments. 

(5) Money paid from the Trust Funds under this subsection to pay 
the costs of providing services to individuals who are entitled to bene- 
fits under section 223 (including services during their waiting pe- 
riods) , or who are entitled to benefits under section 202(d) on the basis 
of the wages and self-employment income of such individuals shall be 
charged to the Federal Disability Insurance Trust Fund, and all other 
money paid out from the Trust Funds under this subsection shall be 
charged to the Federal Old-Age and Survivors Insurance Trust Fund. 
The Secretary shall determine according to such methods and pro- 
cedures as he may deem appropriate — 

(A) the total cost of the services provided under this subsection, 
and 

(B) subject to the provisions of the preceding sentence, the 
amount of such cost which should be charged to each of such Trust 
Funds. 

(6) For the purposes of this subsection the term "vocational reha- 
bilitation services" shall have the meaning assigned to it in the Voca- 



181 



Sec. 223(a) 



tional Kehabilitation Act, except that such services may be limited in 
type, scope, or amount in accordance with regulations of the Secretary 
designed to achieve the purposes of this subsection. 

Disability Insurance Benefit Payments 
Disability Insurance Benefits 

Sec. 223. (a) (1) Every individual who — 

(A) is insured for disability insurance benefits (as determined 
under subsection (c) (1) ), 

(B) has not attained the age of sixty-five, 

(C) has filed application for disability insurance benefits, and 

(D) is under a disability (as defined in subsection (d) ) 

shall be entitled to a disability insurance benefit (i) for each month 
beginning with the first month after his waiting period (as defined 
in subsection (c)(2)) in which he becomes so entitled to such insurance 
benefits, or (ii) for each month beginning with the first month during 
all of which he is under a disability and in which he becomes so en- 
titled to such insurance benefits, but only if he was entitled to disability 
insurance benefits which terminated, or had a period of disability (as 
defined in section 216 (i) ) which ceased, within the sixty-month period 
preceding the first month in which he is under such disability, and 
ending with the month preceding whichever of the following months 
is the earliest : the month in which he dies, the month in which he at- 
tains age 65, or the third month following the month in which his 
disability ceases. No payment under this paragraph may be made to 
an individual who would not meet the definition of disabilitv in sub- 
section (d) except for paragraph (1) (B) thereof for any month in 
which he engages in substantial gainful activity, and no payment may 
be made for such month under subsection (b), (c),or (d) of section 
202 to any person on the basis of the wages and self -employment 
income of such individual. In the case of a deceased individual, the 
requirement of subparagraph (C) may be satisfied by an application 
for benefits filed with respect to such individual within 3 months after 
the month in which he died. 

(2) Except as provided in section 202 (q), such individual's dis- 
ability insurance benefit for any month shall be equal to his primary 
insurance amount for such month determined under section 215 as 
though he had attained age 62, in — 

(A) the first month of his waiting period, or 

(B) in any case in which clause (ii) of paragraph (1) of this 
subsection is applicable, the first month for which he becomes 
entitled to such disability insurance benefits, 

and as though he had become entitled to old-age insurance benefits in 



Sec. 223(b) 



182 



the month in which the application for disability insurance benefits 
was filed and he was entitled to an old-age insurance benefit for each 
month for which (pursuant to subsection (b) ) he was entitled to a dis- 
ability insurance benefit. For the purposes of the preceding sentence, 
in the case of an individual who attained age 62 in or before the first 
month referred to in subparagraph (A) or (B) of such sentence, as 
the case may be, the elapsed years referred to in section 215(b) (3) 
shall not include the year in which he attained age 62, or any year 
thereafter. 

Filing of Application 

(b) An application for disability insurance benefits filed before the 
first month in which the applicant satisfies the requirements for such 
benefits (as prescribed in subsection (a) (1)) shall be deemed a valid 
application only if the applicant satisfies the requirements for such 
benefits before the Secretary makes a final decision on the application. 
If, upon final decision by the Secretary, or decision upon judicial 
review thereof, such applicant is found to satisfy such requirements, 
the application shall be deemed to have been filed in such first month. 
An individual who would have been entitled to a disability insurance 
benefit for any month had he filed application therefor before the 
end of such month shall be entitled to such benefit for such month 
if such application is filed before the end of the 12th month immedi- 
ately succeeding such month. 

Definitions of Insured Status and Waiting Period 

(c) For purposes of this section — 

(1) An individual shall be insured for disability insurance 
benefits in any month if — 

(A) he would have been a fully insured individual (as 
defined in section 214) had he attained age 62 and filed ap- 
plication for benefits under section 202(a) on the first day 
of such month, and 

(B) (i) he had not less than 20 quarters of coverage during 
the 40-quarter period which ends with the quarter in which 
such month occurred, or 

(ii) if such month ends before the quarter in which he at- 
tains (or would attain) age 31, not less than one-half (and 
not less than 6) of the quarters during the period ending 
with the quarter in which such month occurred and begin- 
ning after he attained age 21 were quarters of coverage, 
or (if the number of quarters in such period is less than 12) 
not less than 6 of the quarters in the 12-quarter period end- 
ing with such quarter were quarters of coverage; 



183 



Sec. 223(d) 



except that the provisions of subparagraph (B) of this para- 
graph shall not apply in the case of an individual who is blind 
(within the meaning of "blindness" as defined in section 216 (i) 
(1)). For purposes of subparagraph (B) of this paragraph, 
when the number of quarters in any period is an odd number, such 
number shall be reduced by one, and a quarter shall not be counted 
as part of any period if any part of such quarter was included in a 
period of disability unless such quarter was a quarter of coverage. 

(2) The term "waiting period" means, in the case of any ap- 
plication for disability insurance benefits, the earliest period of 
five consecutive calendar months — 

(A) throughout which the individual with respect to whom 
such application is filed has been under a disability, and 

(B) (i) which begins not earlier than with the first day of 
the seventeenth month before the month in which such ap- 
plication is filed if such individual is insured for disability 
insurance benefits in such seventeenth month, or (ii) if he 
is not so insured in such month, which begins not earlier than 
the first day of the first month after such seventeenth month 
in which he is so insured. 

Notwithstanding the preceding provisions of this paragraph, no 
waiting period may begin for any individual before January 1, 

1957. t ~ :: " ; , . 

Definition of Disability 

(d) (1) The term "disability" means — 

(A) inability to engage in any substantial gainful activity by 
reason of any medically determinable physical or mental impair- 
ment which can be expected to result in death or which has lasted 
or can be expected to last for a continuous period of not less than 
12 months ; or 

(B) in the case of an individual who has attained the age of 
55 and is blind (within the meaning of "blindness" as defined in 
section 216 (i) (1) ) , inability by reason of such blindness to engage 
in substantial gainful activity requiring skills or abilities com- 
parable to those of any gainful activity in which he has previously 
engaged with some regularity and over a substantial period of 
time. 

(2) For purposes of paragraph (1) (A) — 

(A) an individual (except a widow, surviving divorced wife, 
or widower for purposes of section 202 (e) or (f ) shall be deter- 
mined to be under a disability only if his physical or mental 
impairment or impairments are of such severity that he is not 
only unable to do his previous work but cannot, considering his 



Sec. 224(a) 



184 



age, education, and work experience, engage in any other kind of 
substantial gainful work which exists in the national economy, re- 
gardless of whether such work exists in the immediate area in 
which he lives, or whether a specific job vacancy exists for him, 
or whether he would be hired if he applied for work. For pur- 
poses of the preceding sentence (with respect to any individual), 
"work which exists in the national economy" means work which 
exists in significant numbers either in the region where such in- 
dividual lives or in several regions of the country. 

(B) A widow, surviving divorced wife, or widower shall not be 
determined to be under a disability (for purposes of section 202 
(e) or (f)) unless his or her physical or mental impairment or 
impairments are of a level of severity which under regulations 
prescribed by the Secretary is deemed to be sufficient to preclude 
an individual from engaging in any gainful activity. 

(3) For purposes of this subsection, a "physical or mental impair- 
ment" is an impairment that results from anatomical, physiological, 
or psychological abnormalities which are demonstrable by medically 
acceptable clinical and laboratory diagnostic techniques. 

(4) The Secretary shall by regulations prescribe the criteria for 
determining when services performed or earnings derived from serv- 
ices demonstrate an individual's ability to engage in substantial gain- 
ful activity. Notwithstanding the provisions of paragraph (2), an 
individual whose services or earnings meet such criteria shall, except 
for purposes of section 222(c), be found not to be disabled. 

(5) An individual shall not be considered to be under a disability 
unless he furnishes such medical and other evidence of the existence 
thereof as the Secretary may require. 

Reduction of Benefits Based on Disability on Account of Receipt 

of Workmen's Compensation 

Sec. 224. (a) If for any month prior to the month in which an indi- 
vidual attains the age of 62 — 

(1) such individual is entitled to benefits under section 223, and 

(2) such individual is entitled for such month, under a work- 
men's compensation law or plan of the United States or a State 
to periodic benefits for a total or partial disability (whether or 
not permanent), and the Secretary has, in a prior month, received 
notice of such entitlement for such month, 

the total of his benefits under section 223 for such month and of any 
benefits under section 202 for such month based on his wages and self- 
employment income shall be reduced (but not below zero) by the 
amount by which the sum of — 

(3) such total of benefits under sections 223 and 202 for such 
month, and 



185 



Sec. 224(b) 



(4) such periodic benefits payable (and actually paid) for such 
month to such individual under the workmen's compensation law 
or plan, 

exceeds the higher of — 

(5) 80 per centum of his "average current earnings", or 

(6) the total of such individual's disability insurance benefits 
under section 223 for such month and of any monthly insurance 
benefits under section 202 for such month based on his wages and 
self -employment income, prior to reduction under this section. 

In no case shall the reduction in the total of such benefits under sec- 
tions 223 and 202 for a month (in a continuous period of months) 
reduce such total below the sum of — 

(7) the total of the benefits under sections 223 and 202, after 
reduction under this section, with respect to all persons entitled 
to benefits on the basis of such individual's wages and self-employ- 
ment income for such month which were determined for such in- 
dividual and such persons for the first month for which reduction 
under this section was made (or which would have been so deter- 
mined if all of them had been so entitled in such first month) , and 

(8) any increase in such benefits with respect to such individual 
and such persons, before reduction under this section, which is 
made effective for months after the first month for which reduc- 
tion under this section is made. 

For purposes of clause (5), an individual's average current earnings 
means the largest of (A) the average monthly wage used for purposes 
of computing his benefits under section 223, (B) one-sixtieth of the 
total of his wages and self -employment income (computed without 
regard to the limitations specified in sections 209(a) and 211(b) (1) ) 
for the five consecutive calendar years after 1950 for which such wages 
and self -employment income were highest, or (C) one-twelfth of the 
total of his wages and self -employment income (computed without re- 
gard to the limitations specified in sections 209 (a) and 211(b)(1)) for 
the calendar year in which he had the highest such wages and income 
during the period consisting of the calendar year in which he became 
disabled (as defined in section 223(d)) and the five years preceding 
that year. In any case where an individual's wages and self-employ- 
ment income reported to the Secretary for a calendar year reach the 
limitations specified in sections 209(a) and 211(b) (1), the Secretary 
under regulations shall estimate the total of such wages and self -em- 
ployment income for purposes of clauses (B) and (C) of the preced- 
ing sentence on the basis of such information as may be available to 
him indicating the extent (if any) by which such wages and self- 
employment income exceed such limitations. 

(b) If any periodic benefit under a workmen's compensation law or 
plan is payable on other than a monthly basis (excluding a benefit 

64-310 O - 76 - 13 



Sec. 224(b) 



186 



payable as a lump sum except to the extent that it is a commutation of, 
or a substitute for, periodic payments) , the reduction under this sec- 
tion shall be made at such time or times and in such amounts as the 
Secretary finds will approximate as nearly as practicable the reduction 
prescribed by subsection (a). 

(c) Reduction of benefits under this section shall be made after any 
reduction under subsection (a) of section 203, but before deductions 
under such section and under section 222 (b) . 

(d) The reduction of benefits required by this section shall not be 
made if the workmen's compensation law or plan under which a peri- 
odic benefit is payable provides for the reduction thereof when anyone 
is entitled to benefits under this title on the basis of the wages and self- 
employment income of an individual entitled to benefits under sec- 
tion 223. 

(e) If it appears to the Secretary that an individual may be eligible 
for periodic benefits under a workmen's compensation law or plan 
which would give rise to reduction under this section, he may require, 
as a condition of certification for payment of any benefits under section 
223 to any individual for any month and of any benefits under section 
202 of such month based on such individual's wages and self-employ- 
ment income, that such individual certify (i) whether he has filed or 
intends to file any claim for such periodic benefits, and (ii) if he has so 
filed, whether there has been a decision on such claim. The Secretary 
may, in the absence of evidence to the contrary, rely upon such a certifi- 
cation by such individual that he has not filed and does not intend to 
file such a claim, or that he has so filed and no final decision thereon 
has been made, in certifying benefits for payment pursuant to section 
205 (i). 

(f ) (1) In the second calendar year after the year in which reduc- 
tion under this section in the total of an individual's benefits under 
section 223 and any benefits under section 202 based on his wages and 
self -employment income was first required (in a continuous period 
of months), and in each third year thereafter, the Secretary shall re- 
determine the amount of such benefits which are still subject to reduc- 
tion under this section; but such redetermination shall not result in 
any decrease in the total amount of benefits payable under this title on 
the basis of such individual's wages and self-employment income. Such 
redetermined benefit shall be determined as of, and shall become effec- 
tive with, the January following the year in which such redetermina- 
tion was made. 

(2) In making the redetermination required by paragraph (1), the 
individual's average current earnings (as defined in subsection (a)) 
shall be deemed to be the product of his average current earnings as 
initially determined under subsection (a) and the ratio of (i) the 
average of the taxable wages of all persons for whom taxable wages 



187 



Sec. 225 



were reported to the Secretary for the first calendar quarter of the 
calendar year before the calendar year in which such redetermination 
is made, to (ii) the average of the taxable wages of such persons re- 
ported to the Secretary for the first calendar quarter of the taxable 
year before the calendar year in which the reduction was first com- 
puted (but not counting any reduction made in benefits for a previous 
period of disability). Any amount determined under the preceding 
sentence which is not a multiple of $1 shall be reduced to the next 
lower multiple of $1. 1 

(g) Whenever a reduction in the total of benefits for any month 
based on an individual's wages and self-employment income is made 
under this section, each benefit, except the disability insurance benefit, 
shall first be proportionately decreased, and any excess of such reduc- 
tion over the sum of all such benefits other than the disability insur- 
ance benefits shall then be applied to such disability insurance benefit. 

Suspension of Benefits Based on Disability 

Sec. 225. If the Secretary, on the basis of information obtained by 
or submitted to him, believes that an individual entitled to benefits 
under section 223, or that a child who has attained the age of eighteen 
and is entitled to benefits under section 202(d), or that a widow or 
surviving divorced wife who has not attained age 60 and is entitled 
to benefits under section 202 (e) , or that a widower who has not attained 
age 60 and is entitled to benefits under section 202(f), may have 
ceased to be under a disability, the Secretary may suspend the pay- 
ment of benefits under such section 202(d), 202(e), 202(f), or 223, 
until it is determined (as provided in section 221) whether or not such 
individual's disability has ceased or until the Secretary believes that 
such disability has not ceased. In the case of any individual whose dis- 
ability is subject to determination under an agreement with a State 
under section 221(b), the Secretary shall promptly notify the appro- 
priate State of his action under this section and shall request a prompt 
determination of whether such individual's disability has ceased. For 
purposes of this section, the term "disability" has the meaning assigned 
to such term in section 223 (d) . Whenever the benefits of an individual 
entitled to a disability insurance benefit are suspended for any month, 
the benefits of any individual entitled thereto under subsection (b), 
(c), or (d) of section 202, on the basis of the wages and self-employ- 
ment income of such individual, shall be suspended for such month. 
The first sentence of this section shall not apply to any child entitled 
to benefits under section 202(d), if he has attained the age of 18 but 
has not attained the age of 22, for any month during which he is a full- 
time student (as defined and determined under section 202(d)). 



1 Section 224(f) amended by section 8(j) of Public Law 94-202. 



Sec. 226(a) 



188 



Entitlement to Hospital Insurance Benefits 

Sec. 226. "< & rjt Wf . j pbaa^>2j: ,^ At" */ '-r&toffo 

(a) Every individual who — 

(1) has attained age 65, and 

(2) is entitled to monthly insurance benefits under section 202 
or is a qualified railroad retirement beneficiary, 

shall be entitled to hospital insurance benefits under part A of title 
XVIII for each month for which he meets the condition specified in 
subparagraph (B) , beginning with the first month after June 1966 for 
which he meets the conditions specified in subparagraphs (A) and (B). 

(b) Every individual who — 

(1) has not attained age 65, and 

(2) (A) is entitled to, and has for 24 consecutive calendar 
months been entitled to, (i) disability insurance benefits under 
section 223 or (ii) child's insurance benefits under section 202(d) 
by reason of a disability (as defined in section 223(d)) or (iii) 
widow's insurance benefits under section 202(e) or widower's 
insurance benefits under section 202(f) by reason of a disability 
(as defined in section 223(d) ), or (B) is, and has been for not less 
than 24 consecutive months a disabled qualified railroad retire- 
ment beneficiary, within the meaning of section 7(d) of the 
Railroad Retirement Act of 1974, 

shall be entitled to hospital insurance benefits under part A of title 
XVIII for each month beginning with the later of (I) July 1973 or 
(II) the twenty-fifth consecutive month of his entitlement or status 
as a qualified railroad retirement beneficiary described in paragraph 
(2) , and ending with the month following the month in which notice 
of termination of such entitlement to benefits or status as a qualified 
railroad retirement beneficiary described in paragraph (2) is mailed 
to him, or if earlier, with the month before the month in which he 
attains age 65. 

(c) For purposes of subsection (a) — 

(1) entitlement of an individual to hospital insurance benefits 
for a month shall consist of entitlement to have payment made 
under, and subject to the limitations in, part A of title XVIII on 
his behalf for inpatient hospital services, post-hospital extended 
care services, and post-hospital home health services (as such 
terms are defined in part of title XVIII) furnished him in the 
United States (or outside the United States in the case of inpa- 
tient hospital services furnished under the conditions described in 
section 1814 (f) ) during such month ; except that (A) no such pay- 
ment may be made for post-hospital extended care services fur- 
nished before January 1967, and (B) no such payment may be 



189 



Sec. 226(e) 



made for post-hospital extended care services or post-hospital 
home health services unless the discharge from the hospital re- 
quired to qualify such services for payment under part A of title 
XVIII occurred (i) after June 30, 1966, or on or after the first day 
of the month in which he attains age 65, whichever is later, or (ii) 
if he was entitled to hospital insurance benefits pursuant to sub- 
section (b), at a time when he was so entitled; and 

(2) an individual shall be deemed entitled to monthly insurance 
benefits under section 202 or section 223, or to be a qualified rail- 
road retirement beneficiary, for the month in which he died if he 
would have been entitled to such benefits, or would have been a 
qualified railroad retirement beneficiary, for such month had he 
died in the next month. 

(d) For purposes of this section, the term "qualified railroad retire- 
ment beneficiary" means an individual whose name has been certified 
to the Secretary by the Railroad Retirement Board under section 
7(d) of the Railroad Retirement Act of 1974. An individual shall cease 
to be a qualified railroad retirement beneficiary at the close of the 
month preceding the month which is certified by the Railroad Retire- 
ment Board as the month in which he ceased to meet the requirements 
of section 7(d) of the Railroad Retirement Act of 1974. 

(e) Notwithstanding the foregoing provisions of this section, every 
individual who — 

(1) has not attained the age of 65 ; 

(2) (A) is fully or currently insured (as such terms are defined 
in section 214 of this Act) or would be fully or currently insured 
if his service as an employee (as defined in the Railroad Retire- 
ment Act of 1974) after December 31, 1936, were included in the 
term "employment" as defined in this Act, or (B) is entitled to 
monthly insurance benefits under title II of this Act or an annuity 
under the Railroad Retirement Act of 1974, or (C) is the spouse 
or dependent child (as defined in regulations) of an individual 
who is fully or currently insured or would be fully or currently 
insured if his service as an employee (as defined in the Railroad 
Retirement Act of 1974) after December 31, 1936, were included 
in the term "employment" as defined in this Act, or (D) is the 
spouse or dependent child (as defined in regulations) of an indi- 
vidual entitled to monthly insurance benefits under title II of this 
Act or an annuity under the Railroad Retirement Act of 1974 ; and 

(3) is medically determined to have chronic renal disease and 
who requires hemodialysis or renal transplantation for such 
disease ; 

shall be deemed to be disabled for purposes of coverage under parts 



Sec. 226(f) 



190 



A and B of Medicare subject to the deductible, premium, and copay- 
ment provisions of title XVIII. 

(f ) Medicare eligibility on the basis of chronic kidney failure shall 
6egin with the third month after the month in which a course of renal 
dialysis is initiated and would end with the twelfth month after the 
month in which the person has a renal transplant or such course of 
dialysis is terminated. 

(g) The Secretary is authorized to limit reimbursement under Medi- 
care for kidney transplant and dialysis to kidney disease treatment 
centers which meet such requirements as he may by regulation pre- 
scribe: Provided, That such requirements must include at least re- 
quirements for a minimal utilization rate for covered procedures and 
for a medical review board to screen the appropriateness of patients 
for the proposed treatment procedures. 

(h) (1) For purposes of determining entitlement to hospital insur- 
ance benefits under subsection (b) in the case of widows and widowers 
described in paragraph (2)(A)(iii) thereof — 

(A) the term "age 60" in sections 202(e) (1) (B) (ii), 202(e) 
(5), 202(f) (l)(B)(ii), and 202(f)(6) shall be deemed to read 
"age 65"; and 

(B) the phrase "before she attained age 60" in the matter follow- 
ing subparagraph (F) of section 202(e) (1) and the phrase "be- 
fore he attained age 60" in the matter following subparagraph 
(G) of section 202(f) (1) shall each be deemed to read "based on a 
disability". 

(2) For purposes of determining entitlement to hospital insurance 
benefits under subsection (b) in the case of an individual under age 
65 who is entitled to benefits under section 202, and who was entitled 
to widow's insurance benefits or widower's insurance benefits based on 
disability for the month before the first month in which such individ- 
ual was so entitled to old-age insurance benefits (but ceased to be en- 
titled to such widow's or widower's insurance benefits upon becoming 
entitled to such old-age insurance benefits), such individual shall be 
deemed to have continued to be entitled to such widow's insurance 
benefits or widower's insurance benefits for and after such first month. 

(3) For purposes of determining entitlement to hospital insurance 
benefits under subsection (b) any disabled widow age 50 or older who 
is entitled to mother's insurance benefits (and who would have been 
entitled to widow's insurance benefits by reason of disability if she 
had filed for such widow's benefits) shall, upon application, for such 
hospital insurance benefits be deemed to have filed for such widow's 
benefits and shall, upon furnishing proof of such disability prior to 
July 1, 1974, under such procedures as the Secretary may prescribe, be 
deemed to have been entitled to such widow's benefits as of the time she 



191 



Sec. 227(c) 



would have been entitled to such widow's benefits if she had filed a 
timely application therefor. 

(i) For entitlement to hospital insurance benefits in the case of 
certain uninsured individuals, see section 103 of the Social Security 
Amendments of 1965. 

Transitional Insured Status 

Sec. 227. (a) In the case of any individual who attains the age of 
72 before 1969 but who does not meet the requirements of section 
214(a), the 6 quarters of coverage referred to in paragraph (1) of 
section 214(a) shall, instead, be 3 quarters of coverage for purposes 
of determining entitlement of such individual to benefits under sec- 
tion 202(a), and of his wife to benefits under section 202(b), but, in 
the case of such wife, only if she attains the age of 72 before 1969 
and only with respect to wife's insurance benefits under section 202(b) 
for and after the month in which she attains such age. For each month 
before the month in which any such individual meets the requirements 
of section 214(a), the amount of his old-age insurance benefit shall, 
notwithstanding the provisions of section 202(a), be the larger of 
$64.40 or the amount most recently established in lieu thereof under 
section 215 (i) 1 and the amount of the wife's insurance benefit of his 
wife shall, notwithstanding the provisions of section 202(b), be the 

larger of $32.20 or the amount most recently established in lieu thereof 

under section 215 (i). 2 

(b) In the case of any individual who has died, who does not meet 

the requirements of section 214(a), and whose widow attains age 72 
before 1969, the 6 quarters of coverage referred to in paragraph (3) 
of section 214(a) and in paragraph (1) thereof shall, for purposes of 
determining her entitlement to widow's insurance benefits under sec- 
tion 202(e), instead be — 

(1) 3 quarters of coverage if such widow attains the age of 72 
in or before 1966, 

(2) 4 quarters of coverage if such widow attains the age of 72 
in 1967, or 

(3) 5 quarters of coverage if such widow attains the age of 72 
in 1968. ;! '/ * ' ' ''l f°jj ;' T " ' 

The amount of her widow's insurance benefit for each month shall, 
notwithstanding the provisions of section 202(e) (and section 202 
(m) ), be the larger of $64.40 or the amount most recently established 
in lieu thereof under section 215 (i). 1 

(c) In the case of any individual who becomes, or upon filing appli- 
cation therefor would become, entitled to benefits under section 202(a) 
by reason of the application of subsection (a) of this section, who dies, 
and whose widow attains the age of 72 before 1969, such deceased in- 



1 $69.60 effective June 1975. (40 F.R. 22289.) 

2 $34.80 effective June 1975. (40 F.R. 22289.) 



Sec. 228(a) 



192 



dividual shall be deemed to meet the requirements of subsection (b) 
of this section for purposes of determining entitlement of such widow 
to widow's insurance benefits under section 202(e) . 

Benefits at Age 72 for Certain Uninsured Individuals 

Eligibility 

Sec. 228. (a) Every individual who — 

(1) has attained the age of 72, 

(2) (A) attained such age before 1968, or (B) has not less than 
3 quarters of coverage, whenever acquired, for each calendar year 
elapsing after 1966 and before the year in which he attained such 
age, 

(3) is a resident of the United States (as defined in subsection 
(e)), and is (A) a citizen of the United States or (B) an alien 
lawfully admitted for permanent residence who has resided in the 
United States (as defined in section 210 (i) ) continuously during 
the 5 years immediately preceding the month in which he files 
application under this section, and 

(4) has filed application for benefits under this section, 
shall (subject to the limitations in this section) be entitled to a benefit 
under this section for each month beginning with the first month after 
September 1966 in which he becomes so entitled to such benefits and 
ending with the month preceding the month in which he dies. No 
application under this section which is filed by an individual more 
than 3 months before the first month in which he meets the require- 
ments of paragraphs (1), (2), and (3) shall be accepted as an appli- 
cation for purposes of this section. 

Benefit Amount 

(b) (1) Except as provided in paragraph (2), the benefit amount to 
which an individual is entitled under this section for any month shall 
be the larger of $64.40 or the amount most recently established in lieu 
thereof under section 215 (i). 1 

(2) If both husband and wife are entitled (or upon application 
would be entitled) to benefits under this section for any month, the 
amount of the husband's benefit for such month shall be the larger of 
$64.40 or the amount most recently established in lieu thereof under 
section 215 (i) 1 and the amount of the wife's benefit for such month shall 
be the larger of $32.20 or the amount most recently established in lieu 
thereof under section 215 (i). 2 

Reduction for Governmental Pension System Benefits 

(c) (1) The benefit amount of any individual under this section for 
any month shall be reduced (but not below zero) by the amount of any 

1 $69.60 effective June 1975. (40 F.R. 22289.) 

2 $34.80 effective June 1975. (40 F.R. 22289.) 



193 



Sec. 228(c) 



periodic benefit under a governmental pension system for which he is 
eligible for such month. 

(2) In the case of a husband and wife only one of whom is entitled 
to benefits under this section for any month, the benefit amount, after 
any reduction under paragraph (1) , shall be further reduced (but not 
below zero) by the excess (if any) of (A) the total amount of any 
periodic benefits under governmental pension systems for which the 
spouse who is not entitled to benefits under this section is eligible for 
such month, over (B) the larger of $32.20 or the amount most recently 
established in lieu thereof under section 215 (i). 1 

(3) In the case of a husband and wife both of whom are entitled 
to benefits under this section for any month — 

(A) the benefit amount of the wife, after any reduction under 
paragraph (1), shall be further reduced (but not below zero) by 
the excess (if any) of (i) the total amount of any periodic benefits 
under governmental pension systems for which the husband is 
eligible for such month, over (ii) the larger of $64.40 or the 
amount most recently established in lieu thereof under section 
215 (i) 2 ; and 

(B) the benefit amount of the husband, after any reduction 
under paragraph (1), shall be further reduced (but not below 
zero) by the excess (if any) of (i) the total amount of any pe- 
riodic benefits under governmental pension systems for which the 
wife is eligible for such month, over (ii) the larger of $32.20 or 
the amount most recently established in lieu thereof under section 
215(i). 1 

(4) For purposes of this subsection, in determining whether an 
individual is eligible for periodic benefits under a governmental pen- 
sion system — 

(A) such individual shall be deemed to have filed application 
for such benefits, 

(B) to the extent that entitlement depends on an application 
by such individual's spouse, such spouse shall be deemed to have 
filed application, and 

(C) to the extent that entitlement depends on such individual 
or his spouse having retired, such individual and his spouse shall 
be deemed to have retired before the month for which the deter- 
mination of eligibility is being made. 

(5) For purposes of this subsection, if any periodic benefit is pay- 
able on any basis other than a calendar month, the Secretary shall 
allocate the amount of such benefit to the appropriate calendar months. 

(6) If, under the foregoing provisions of this section, the amount 
payable for any month would be less than $1, such amount shall be 

1 $34.80 effective June 1975. (40 F.R. 22289.) 
• $69.60 effective June 1975. (40 F.R. 22289.) 



Sec. 228(d) 



194 



reduced to zero. In the case of a husband and wife both of whom 
are entitled to benefits under this section for the month, the preceding 
sentence shall be applied with respect to the aggregate amount so pay- 
able for such month. 

(7) If any benefit amount computed under the foregoing provisions 
of this section is not a multiple of $0.10, it shall be raised to the next 
higher multiple of $0.10. 

(8) Under regulations prescribed by the Secretary, benefit payments 
under this section to an individual (or aggregate benefit payments 
under this section in the case of a husband and wife) of less than $5 
may be accumulated until they equal or exceed $5. 

Suspension for Months in Which Cash Payments Are Made Under Public 

Assistance 

(d) The benefit to which any individual is entitled under this 
section for any month shall not be paid for such month if — 

(1) such individual receives aid or assistance in the form of 
money payments in such month under a State plan approved 
under title I, X, XIV, or XVI or part A of title IV, or 

(2) such individual's husband or wife receives such aid or as- 
sistance in such month, and under the State plan the needs of 
such individual were taken into account in determining eligibility 
for (or amount of) such aid or assistance, 

unless the State agency administering or supervising the administra- 
tion of such plan notifies the Secretary, at such time and in such 
manner as may be prescribed in accordance with regulations of the 
Secretary, that such payments to such individual (or such individual's 
husband or wife) under such plan are being terminated with the pay- 
ment or payments made in such month and such individual is not an 
individual with respect to whom supplemental security income benefits 
are payable pursuant to title XVI or section 211 of Public Law 93-66 
for the following month, nor shall such benefit be paid for such month 
if such individual is an individual with respect to whom supplemental 
security income benefits are payable pursuant to title XVI or section 
211 of Public Law 93-66 for such month, unless the Secretary deter- 
mines that such benefits are not payable with respect to such indi- 
vidual for the month following such month. 

Suspension Where Individual Is Residing Outside the United States 

(e) The benefit to which any individual is entitled under this sec- 
tion for any month shall not be paid if, during such month, such 
individual is not a resident of the United States. For purposes of this 
subsection, the term "United States" means the 50 States and the 
District of Columbia. 



195 



Sec. 228(h) 



Treatment as Monthly Insurance Benefits 

(f ) For purposes of subsections (t) and (u) of section 202, and of 
section 1840 a monthly benefit under this section shall be treated as a 
monthly insurance benefit payable under section 202. 

Annual Reimbursement of Federal Old-Age and Survivors Insurance 

Trust Fund 

(g) There are authorized to be appropriated to the Federal Old- 
Age and Survivors Insurance Trust Fund for the fiscal year ending 
June 30, 1969, and for each fiscal year thereafter, such sums as the 
Secretary of Health, Education, and Welfare deems necessary on 
account of — 

(1) payments made under this section during the second pre- 
ceding fiscal year and all fiscal years prior thereto to individuals 
who, as of the beginning of the calendar year in which falls the 
month for which payment was made, had less than 3 quarters of 
coverage, 

(2) the additional administrative expenses resulting from the 
payments described in paragraph (1) , and 

(3) any loss in interest to such Trust Fund resulting from such 
payments and expenses, 

in order to place such Trust Fund in the same position at the end of 
such fiscal year as it would have been in if such payments had not 
been made. 

Definitions 

(h) For purposes of this section — 

(1) The term "quarter of coverage" includes a quarter of cover- 
age as defined in section 5(1) of the Railroad Retirement Act of 
1937. 

(2) The term "governmental pension system" means the in- 
surance system established by this title or any other system or 
fund established by the United States, a State, any political sub- 
division of a State, or any wholly owned instrumentality of any 
one or more of the foregoing which provides for payment of (A) 
pensions, (B) retirement or retired pay, or (C) annuities or 
similar amounts payable on account of personal services per- 
formed by any individual (not including any payment under any 
workmen's compensation law or any payment by the Veterans' 
Administration as compensation for service-connected disability 
or death). 

(3) The term "periodic benefit" includes a benefit payable in 
a lump sum if it is a commutation of, or a substitute for, periodic 
payments. 



Sec. 229(a) 



196 



(4) The determination of whether an individual is a husband 
or wife for any month shall be made under subsection (h) of sec- 
tion 216 without regard to subsections (b) and (f ) of section 216. 

Benefits in Case of Members of the Uniformed Services 

Sec. 229. (a) For purposes of determining entitlement to and the 
amount of any monthly benefit for any month after December 1972, 
or entitlement to and the amount of any lump-sum death payment in 
case of a death after such month, payable under this title on the basis of 
the wages and self-employment income of any individual, and for 
purposes of section 216 (i) (3), such individual shall be deemed to 
have been paid, in each calendar quarter occurring after 1956 in which 
he was paid wages for service as a member of a uniformed service (as 
defined in section 210 (m) ) which was included in the term "employ- 
ment" as defined in section 210(a) as a result of the provisions of 
section 210(1), wages (in addition to the wages actually paid to him 
for such service) of $300. 

(b) There are authorized to be appropriated to the Federal Old- 
Age and Survivors Insurance Trust Fund, the Federal Disability In- 
surance Trust Fund, and the Federal Hospital Insurance Trust Fund 
annually, as benefits under this title and part A of title XVIII are 
paid after December 1967, such sums as the Secretary determines to 
be necessary to meet (1) the additional costs, resulting from subsection 
(a), of such benefits (including lump-sum death payments), (2) the 
additional administrative expenses resulting therefrom, and (3) any 
loss in interest to such trust funds resulting from the payment of such 
amounts. Such additional costs shall be determined after any increases 
in such benefits arising from the application of section 217 have been 
made. 

Adjustment of the Contribution and Benefit Base 

Sec. 230. (a) Whenever the Secretary pursuant to section 215 (i) 
increases benefits effective with the June following a cost-of-living 
computation quarter, he shall also determine and publish in the Federal 
Register on or before November 1 of the calendar year in which such 
quarter occurs the contribution and benefit base determined under sub- 
section (b) 1 which shall be effective with respect to remuneration paid 
after the calendar year in which such quarter occurs and taxable years 
beginning after such year. 

(b) The amount of such contribution and benefit base shall be the 
amount of the contribution and benefit base in effect in the year in 
which the determination is made or, if larger, the product of — 



1 $14,100 for 1975 ; $15,300 for 1976. 



197 



Sec. 231(a) 



(1) the contribution and benefit base which was in effect with 
respect to remuneration paid in (and taxable years beginning in) 
the calendar year in which the determination under subsection 
(a) with respect to such particular calendar year was made, and 

(2) the ratio of (A) the average of the wages of all employees 
as reported to the Secretary of the Treasury for the calendar year 
preceding the calendar year in which the determination under 
subsection (a) with respect to such particular calendar year was 
made to (B) the average of the wages of all employees as reported 
to the Secretary of the Treasury for the calendar year 1973 or, 
if later, the calendar year preceding the most recent calendar 
year in which an increase in the contribution and benefit base was 
enacted or a determination resulting in such an increase was made 
under subsection (a), 

with such product, if not a multiple of $300, being rounded to the next 
higher multiple of $300 where such product is a multiple of $150 but 
not of $300 and to the nearest multiple of $300 in any other case. For 
purposes of this subsection, the average of the wages for the cal- 
endar year 1978 (or any prior calendar year) shall, in the case of 
determinations made under subsection (a) prior to December 31, 1979, 
be deemed to be an amount equal to 400 per centum of the amount of the 
average of the taxable wages of all employees as reported to the 
Secretary for the first calendar quarter of such calendar year. 1 

(c) For purposes of this section, and for purposes of determining 
wages and self -employment income under sections 209, 211, 213, and 
215 of this Act and sections 1402, 3121, 3122, 3125, 6413, and 6654 of 
the Internal Eevenue Code of 1954, the "contribution and benefit base" 
with respect to remuneration paid in (and taxable years beginning 
in) any calendar year after 1973 and prior to the calendar year with 
the June of which the first increase in benefits pursuant to section 
215 (i) of this Act becomes effective shall be $13,200 or (if applicable) 
such other amount as may be specified in a law enacted subsequent to 
the law which added this section. 

Benefits in Case of Certain Individuals Interned During World 

: ^ , Tv War II 

Sec. 231. (a) For the purposes of this section the term "internee" 
means an individual who was interned during any period of time from 
December 7, 1941, through December 31, 1946, at a place within the 
United States operated by the Government of the United States for the 
internment of United States citizens of Japanese ancestry. 



1 Subsection (b) was amended by section 8(h) of Public Law 94—202. 



Sec. 231(b) 



198 



(b) (1) For purposes of determining entitlement to and the amount 
of any monthly benefit for any month after December 1972, or entitle- 
ment to and the amount of any lump-sum death payment in the case of 
a death after such month, payable under this title on the basis of the 
wages and self-employment income of any individual, and for purposes 
of section 216 (i) (3) , such individual shall be deemed to have been paid 
during any period after he attained age 18 and for which he was an 
internee, wages (in addition to any wages actually paid to him) at a 
weekly rate of basic pay during such period as follows — 

(A) in the case such individual was not employed prior to the 
beginning of such period, 40 multiplied by the minimum hourly 

- rate or rates in effect at any such time under section 206(a) (1) of 
title 29, United States Code, for each full week during such pe- 
riod : and 

(B) in the case such individual who was employed prior to the 
beginning of such period, 40 multiplied by the greater of (i) the 
highest hourly rate received during any such employment, or (ii) 
the minimum hourly rate or rates in effect at any such time under 
section 206(a) (1) of title 29, United States Code, for each full 
week during such period. 

(2) This subsection shall not be applicable in the case of any 
monthly benefit or lump-sum death payment if — 

(A) a larger such benefit or payment, as the case may be, would 
be payable without its application ; or 

(B) a benefit (other than a benefit payable in a lump-sum unless 
it is a commutation of, or a substitute for, periodic payments) 
which is based, in whole or in part, upon internment during any 
period from December 7, 1941, through December 31, 1946, at a 
place within the United States operated by the Government of the 
United States for the internment of United States citizens of J ap- 
anese ancestry, is determined by any agency or wholly owned in- 
strumentality of the United States to be payable by it under any 
other law of the United States or under a system established by 
such agency or instrumentality. 

The provisions of clause (B) shall not apply in the case of any monthly 
benefit or lump-sum death payment under this title if its application 
would reduce by $0.50 or less the primary insurance amount (as com- 
puted under section 215 prior to any recomputation thereof pursuant 
to subsection (f ) of such section) of the individual on whose wages and 
self -employment income such benefit or payment is based. The provi- 
sions of clause (B) shall also not apply for purposes of section 216 
(i)(3). 

(3) Upon application for benefits, a recalculation of benefits (by 
reason of this section), or a lump-sum death payment on the basis of 



199 



Sec. 232 



the wages and self-employment income of any individual who was an 
internee, the Secretary of Health, Education, and Welfare shall accept 
the certification of the Secretary of Defense or his designee concerning 
any period of time for which an internee is to receive credit under para- 
graph (1) and shall make a decision without regard to clause (B) of 
paragraph (2) of this subsection unless he has been notified by some 
other agency or instrumentality of the United States that, on the basis 
of the period for which such individual was an internee, a benefit de- 
scribed in clause (B) of paragraph (2) has been determined by such 
agency or instrumentality to be payable b}^ it. If the Secretary of 
Health, Education, and Welfare has not been so notified, he shall then 
. ascertain whether some other agency or wholly owned instrumentality 
of the United States has decided that a benefit described in clause (B) 
of paragraph (2) is payable by it. If any such agency or instrumental- 
ity has decided, or thereafter decides, that such a benefit is payable by 
it, it shall so notify the Secretary of Health, Education, and Welfare, 
and the Secretary shall certify no further benefits for payment or shall 
recompute the amount of any further benefits payable, as may be re- 
quired by this section. 

(4) Any agency or wholly owned instrumentality of the United 
States which is authorized by any law of the United States to pay 
benefits, or has a system of benefits which are based, in whole or in 
part, on any period for which any individual was an internee shall, 
at the request of the Secretary of Health, Education, and Welfare, 
certify to him, with respect to any individual who was an internee such 
information as the Secretary deems necessary to carry out his func- 
tions under paragraph (3) of this subsection. 

(c) There are authorized to be appropriated to the Trust Funds and 
the Federal Hospital Insurance Trust Fund for the fiscal year ending 
June 30, 1978, such sums as the Secretary determines would place the 
Trust Funds and the Federal Hospital Insurance Trust Fund in the 
position in which they would have been if the preceding provisions 
of this section had not been enacted. 

Processing of Tax Data 

Sec. 232. The Secretary of the Treasury shall make available infor- 
mation returns filed pursuant to part III of subchapter A of chapter 61 
of subtitle F of the Internal Revenue Code of 1954, to the Secretary 
for the purposes of this title and title XL The Secretary and the Sec- 
retary of the Treasury are authorized to enter into an agreement for 
the processing by the Secretary of information contained in returns 
filed pursuant to part III of subchapter A of chapter 61 of subtitle F 
of the Internal Revenue Code of 1954. Notwithstanding the provisions 

• 



Sec. 232 200 

of section 6103 (a) of the Internal Revenue Code of 1954, the Secretary 
of the Treasury shall make available to the Secretary such documents 
as may be agreed upon as being necessary for purposes of such proc- 
essing. The Secretary shall process any withholding tax statements or 
other documents made available to him by the Secretary of the Treas- 
ury pursuant to this section. Any agreement made pursuant to this 
section shall remain in full force and effect until modified or otherwise 
changed by mutual agreement of the Secretary and the Secretary of 
the Treasury. 1 

1 Section 232 was added by section 8(b) of Public Law 94-202 effective with respect 
to income reports received after 1977. 



TITLE III— GRANTS TO STATES FOR UNEMPLOYMENT 
COMPENSATION ADMINISTRATION 



Page 1 



Sec. 301. Appropriations 

Sec. 302. Payments to States 

Sec. 303. Provisions of State Laws 
Sec. 304. Judicial Review 



201 
201 
201 
204 



Appropriations 



Section 301. The amounts made available pursuant to section 
901(c) (1) (A) for the purpose of assisting the States in the adminis- 
tration of their unemployment compensation laws shall be used as 
hereinafter provided. 



Sec. 302. (a) The Secretary of Labor shall from time to time certify 
to the Secretary of the Treasury for payment to each State which has 
an unemployment compensation law approved by the Secretary of 
Labor under the Federal Unemployment Tax Act such amounts as 
the Secretary of Labor determines to be necessary for the proper and 
efficient administration of such law during the fiscal year for which 
such payment is to be made. The Secretary of Labor's determination 
shall be based on (1) the population of the State; (2) an estimate of 
the number of persons covered by the State law and of the cost of 
proper and efficient administration of such law; and (3) such other 
factors as the Secretary of Labor finds relevant. The Secretary of 
Labor shall not certify for payment under this section in any fiscal 
year a total amount in excess of the amount appropriated therefor for 
such fiscal year. 

(b) Out of the sums appropriated therefor, the Secretary of the 
Treasury shall, upon receiving a certification under subsection (a) 
pay, through the Fiscal Service of the Treasury Department and prior 
to audit or settlement by the General Accounting Office, to the State 
agency charged with the administration of such law the amount so 
certified. 



Sec. 303. (a) The Secretary of Labor shall make no certification 
for payment to any State unless he finds that the law of such State, 



Payments to States 



Provisions of State Laws 



1 This table of contents does not appear In the law. 

(201) 



64-310 O - 76 - 14 



Sec. 303(a) 



202 



approved by him under the Federal Unemployment Tax Act, includes 
provision for — 

(1) Such methods of administration (including after Jan- 
uary 1, 1940, methods relating to the establishment and mainte- 
nance of personnel standards on a merit basis, except that the 
Secretary of Labor shall exercise no authority with respect to the 
selection, tenure of office, and compensation of any individual 
employed in accordance with such methods) as are found by the 
Secretary of Labor to be reasonably calculated to insure full 
payment of unemployment compensation when due ; and 

(2) Payment of unemployment compensation solely through 
public employment offices or such other agencies as the Secretary 
of Labor may approve ; and 

(3) Opportunity for a fair hearing, before an impartial tri- 
bunal, for all individuals whose claims for unemployment com- 
pensation are denied ; and 

(4) The payment of all money received in the unemployment 
fund of such State (except for refunds of sums erroneously paid 
into such fund and except for refunds paid in accordance with 
the provisions of section 3305(b) of the Federal Unemployment 
Tax Act), immediately upon such receipt, to the Secretary of the 
Treasury to the credit of the Unemployment Trust Fund estab- 
lished by section 904 ; and 

(5) Expenditure of all money withdrawn from an unemploy- 
ment fund of such State, in the payment of unemployment com- 
pensation, exclusive of expenses of administration, and for refunds 
of sums erroneously paid into such fund and refunds paid in 
accordance with the provisions of section 3305(b) of the Federal 
Unemployment Tax Act : Provided, That an amount equal to the 
amount of employee payments into the unemployment fund of a 
State may be used in the payment of cash benefits to individuals 
with respect to their disability, exclusive of expenses of adminis- 
tration : Provided further, That the amounts specified by section 
903(c) (2) may, subject to the conditions prescribed in such sec- 
tion, be used for expenses incurred by the State for administra- 
tion of its unemployment compensation law and public employ- 
ment offices ; and 

(6) The making of such reports in such form and containing 
such information, as the Secretary of Labor may from time to 
time require, and compliance with such provisions as the Secre- 
tary of Labor may from time to time find necessary to assure the 
correctness and verification of such reports; and 

(7) Making available upon request to any agency of the United 
States charged with the administration of public works or assist- 



203 



Sec. 303(c) 



ance through public employment, the name, address, ordinary 
occupation and employment status of each recipient of unem- 
ployment compensation, and a statement of such recipient's rights 
to further compensation under such law ; and 

(8) Effective July 1, 1941, the expenditure of all moneys re- 
ceived pursuant to section 302 of this title solely for the purposes 
and in the amounts found necessary by the Secretary of Labor for 
the proper and efficient administration of such State law ; and 

(9) Effective July 1, 1941, the replacement, within a reasonable 
time, of any moneys received pursuant to section 302 of this title, 
which, because of any action or contingency, have been lost or 
have been expended for purposes other than, or in amounts in 
excess of, those found necessary by the Secretary of Labor for 
the proper administration of such State law. 

(b) Whenever the Secretary of Labor, after reasonable notice and 
opportunity for hearing to the State agency charged with the admin- 
istration of the State law, finds that in the administration of the law 
there is — 

(1) a denial, in a substantial number of cases, of unemploy- 
ment compensation to individuals entitled thereto under such 
law; or 

(2) a failure to comply substantially with any provision speci- 
fied in subsection (a) ; 

the Secretary of Labor shall notify such State agency that further 
payments will not be made to the State until he is satisfied that there 
is no longer any such denial or failure to comply. Until the Secretary 
of Labor is so satisfied, he shall make no further certification to the 
Secretary of the Treasury with respect to such State : Provided, That 
there shall be no finding under clause (1) until the question of entitle- 
ment shall have been decided by the highest judicial authority given 
jurisdiction under such State law: Provided further, That any costs 
may be paid with respect to any claimant by a State and included as 
costs of administration of its law. 

(c) The Secretary of Labor shall make no certification for pay- 
ment to any State if he finds, after reasonable notice and opportunity 
for hearing to the State agency charged with the administration of 
the State law — 

(1) That such State does not make its records available to 
the Railroad Retirement Board, and furnish to the Railroad 
Retirement Board at the expense of the Railroad Retirement 
Board such copies thereof as the Railroad Retirement Board 
deems necessary for its purposes ; or 

(2) That such State is failing to afford reasonable cooperation 
with every agency of the United States charged with the admin- 
istration of any unemployment insurance law. 



Sec. 304(a) 204 



Judicial Review 

Sec. 304. (a) Whenever the Secretary of Labor — 

(1) finds that a State law does not include any provision speci- 
fied in section 303 (a) , or 

(2) makes a finding with respect to a State under subsection 
(b) or (c) of section 303, 

such State may, within 60 days after the Governor of the State has 
been notified of such action, file with the United States court of 
appeals for the circuit in which such State is located or with the 
United States Court of Appeals for the District of Columbia, a pe- 
tition for review of such action. A copy of the petition shall be forth- 
with transmitted by the clerk of the court to the Secretary of Labor. 
The Secretary of Labor thereupon shall file in the court the record of 
the proceedings on which he based his action as provided in section 
2112 of title 28, United States Code. 

(b) The findings of fact by the Secretary of Labor, if supported 
by substantial evidence, shall be conclusive; but the court, for good 
cause shown, may remand the case to the Secretary of Labor to take 
further evidence and the Secretary of Labor may thereupon make new 
or modified findings of fact and may modify his previous action, and 
shall certify to the court the record of the further proceedings. Such 
new or modified findings of fact shall likewise be conclusive if sup- 
ported by substantial evidence. 

(c) The court shall have jurisdiction to affirm the action of the 
Secretary of Labor or to set it aside, in whole or in part. The judg- 
ment of the court shall be subject to review by the Supreme Court 
of the United States upon certiorari or certification as provided in 
section 1254 of title 28 of the United States Code. 

(d) (1) The Secretary of Labor shall not withhold any certifica- 
tion for payment to any State under section 302 until the expiration 
of 60 days after the Governor of the State has been notified of the 
action referred to in paragraph (1) or (2) of subsection (a) or until 
the State has filed a petition for review of such action, whichever 
is earlier. 

(2) The commencement of judicial proceedings under this section 
shall stay the Secretary's action for a period of 30 days, and the court 
may thereafter grant interim relief if warranted, including a further 
stay of the Secretary's action and including such other relief as may 
be necessary to preserve status or rights. 

(e) Any judicial proceedings under this section shall be entitled to, 
and, upon request of the Secretary or the State, shall receive a prefer- 
ence and shall be heard and determined as expeditiously as possible. 



TITLE IV— GRANTS TO STATES FOR AID AND SERVICES 
TO NEEDY FAMILIES WITH CHILDREN AND FOR 
CHILD-WELFARE SERVICES 

Part A — Aid to Families With Dependent Children 

Page 1 

Sec. 401. Appropriation 206 

Sec. 402. State Plans for Aid and Services to Needy Families With 

Children 206 

Sec. 403. Payment to States 215 

Sec. 404. Operation of State Plans 220 

Sec. 405. Use of Payments for Benefit of Child 221 

Sec. 406. Definitions 222 

Sec. 407. Dependent Children of Unemployed Fathers 224 

Sec. 408. Federal Payments for Foster Home Care of Dependent Children. 226 

Sec. 409. Community Work and Training Programs 228 

Sec. 410. [Repealed] 230 

Part B — Child- Welfare Services 

Sec. 420. Appropriation . 230 

Sec. 421. Allotments to States 230 

Sec. 422. Payment to States 231 

Sec. 423. Allotment Percentage and Federal Share 234 

Sec. 424. Reallotment 234 

Sec. 425. Definition 235 

Sec. 426. Research, Training, or Demonstration Projects 235 

Part C — Work Incentive Program for Recipients of Aid 
Under State Plan Approved Under Part A 

Sec. 430. Purpose 236 

Sec. 431. Appropriation 236 

Sec. 432. Establishment of Programs 237 

Sec. 433. Operation of Program 239 

Sec. 434. Incentive Payment 241 

Sec. 435. Federal Assistance 241 

Sec. 436. Period of Enrollment 242 

Sec. 437. Relocation of Participants 242 

Sec. 438. Participants Not Federal Employees 242 

Sec. 439. Rules and Regulations 242 

Sec. 440. Annual Report 243 

Sec. 441. Evaluation and Research 243 

Sec. 442. Technical Assistance for Providers of Employment or Training-- 243 

Sec. 443. Collection of State Share 243 

Sec. 444. Agreements With Other Agencies Providing Assistance to 

Families of Unemployed Parents 244 



1 This table of contents does not appear in the law. 

(205) 



Sec. 401 



206 



Part D — Child Support and Establishment of Paternity 

Page 1 



Sec. 451. Appropriation 245 

Sec. 452. Duties of the Secretary 246 

Sec. 453. Parent locator service 247 

Sec. 454. State plan for child support 249 

Sec. 455. Payments to States 251 

Sec. 456. Support obligations ^ 252 

Sec. 457. Distribution of proceeds 252 

Sec. 458. Incentive payment to localities 254 

Sec. 459. Consent by the United States to garnishment and similar pro- 
ceedings for enforcement of child support and alimony 

obligations 254 

Sec. 460. Civil actions to enforce child support obligations 254 



Part A — Aid to Families With Dependent Children 

Appropriation 

Section 401. For the purpose of encouraging the care of dependent 
children in their own homes or in the homes of relatives by enabling 
each State to furnish financial assistance and rehabilitation and other 
services, as far as practicable under the conditions in such State, to 
needy dependent children and the parents or relatives with whom 
they are living to help maintain and strengthen family life and to 
help such parents or relatives to attain or retain capability for the 
maximum self-support and personal independence consistent with the 
maintenance of continuing parental care and protection, there is hereby 
authorized to be appropriated for each fiscal year a sum sufficient to 
carry out the purposes of this part. The sums made available under 
this section shall be used for making payments to States which have 
submitted, and had approved by the Secretary of Health, Education, 
and Welfare, State plans for aid and services to needy families with 
children. 

State Plans for Aid and Services to Needy Families With 

Children 

Sec. 402. (a) A State plan for aid and services to needy families 
with children must — 

(1) provide that it shall be in effect in all political subdivisions 
of the State, and, if administered by them, be mandatory upon them : 

(2) provide for financial participation by the State ; 

(3) either provide for the establishment or designation of a single 
State agency to administer the plan, or provide for the establishment 
or designation of a single State agency to supervise the administration 
of the plan ; 



1 This table of contents does not appear In the law. 



207 



Sec. 402(a) 



(4) provide for granting an opportunity for a fair hearing before 
the State agency to any individual whose claim for aid to families with 
dependent children is denied or is not acted upon with reasonable 
promptness ; 

(5) provide such methods of administration (including after 
January 1, 1940, methods relating to the establishment and mainte- 
nance of personnel standards on a merit basis, except that the Secre- 
tary shall exercise no authority with respect to the selection, tenure of 
office, and compensation of any individual employed in accordance 
with such methods) as are found by the Secretary to be necessary for 
the proper and efficient operation of the plan ; and 1 

(6) provide that the State agency will make such reports, in 
such form and containing such information, as the Secretary may 
from time to time require, and comply with such provisions as the 
Secretary may from time to time find necessary to assure the correct- 
ness and verification of such reports ; 

(7) except as may be otherwise provided in clause (8), provide 
that the State agency shall, in determining need, take into considera- 
tion any other income and resources of any child or relative claiming 
aid to families with dependent children, or of any other individual 
(living in the same home as such child and relative) whose needs the 
State determines should be considered in determining the need of the 
child or relative claiming such aid, as well as any expenses reasonably 
attributable to the earning of any such income ; 2 

1 In the case of Guam, Puerto Rico, and the Virgin Islands, Section 402(a)(5) reads 
as follows : 

"(5) provide (A) such methods of administration (including after January 1, 1940, 
methods relating to the establishment and maintenance of personnel standards on a merit 
basis, except that the Secretary shall exercise no authority with respect to the selection, 
tenure of office, and compensation of any individual employed In accordance with such 
methods) as are found by the Secretary to be necessary for the proper and efficient oper- 
ation of the plan, and (B) for the training and effective use of paid subprofesslonal staff, 
with particular emphasis on the full-time or part-time employment of recipients and 
other persons of low income, as community services aides, in the administration of the 
plan and for the use of nonpaid or partially paid volunteers in a social service volunteer 
program in providing services to applicants and recipients and in assisting any advisory 
committees established by the State agency ; and". 

2 P.L. 90-248, sec. 248(c), provides: 

"Effective July 1, 1969, neither the provisions of clauses (A) through (C) of section 
402(a)(7) of such Act as in effect before the enactment of this Act nor the provisions 
of section 402(a)(8) of such Act as amended by section 202(b) of this Act shall apply 
In the case of Puerto Rico, the Virgin Islands, or Guam. Effective no later than July 1, 
1972, the State plans of Puerto Rico, the Virgin Islands, and Guam approved under sec- 
tion 402 of such Act shall provide for the disregarding of income in making the deter- 
mination under section 402(a)(7) of such Act in amounts (agreed to between the Secre- 
tary and the State agencies Involved) sufficiently lower than the amounts specified In 
section 402(a)(8) of such Act to reflect appropriately the applicable differences in Income 
levels." 

P.L. 93-647, sec. 101(c)(1), provides: 

"Notwithstanding the provisions of section 402(a) of the Social Security Act, in addition 
to the amounts required to be disregarded under clause (8) (A) of such section, there is 
Imposed the requirement (and the State plan shall be deemed to include the requirement) 
that for the 15 months beginning July 1, 1975, in making the determination under clause 
(7), the State agency shall with respect to any month in such year and in addition to the 
amounts required to be disregarded under clause (8) (A), disregard amounts payable under 
section 457(a) (1)." 



Sec. 402(a) 



208 



(8) provide that, in making the determination under clause (7), 
the State agency — 

(A) shall with respect to any month disregard — 

(i) all of the earned income of each dependent child re- 
ceiving aid to families with dependent children who is (as 
determined by the State in accordance with standards pre- 
scribed by the Secretary) a full-time student or part-time 
student who is not a full-time employee attending a school, 
college, or university, or a course of vocational or technical 
training designed to fit him for gainful employment, and 

(ii) in the case of earned income of a dependent child not 
included under clause (i), a relative receiving such aid, and 
any other individual (living in the same home as such rela- 
tive and child) whose needs are taken into account in making 
such determination, the first $30 of the total of such earned 
income for such month plus one-third of the remainder of 
such income for such month (except that the provisions of 
this clause (ii) shall not apply to earned income derived from 
participation on a project maintained under the programs 
established by section 432(b) (2) and (3) ) ; and 

(B) (i) may, subject to the limitations prescribed by the 
Secretary, permit all or any portion of the earned or other income 
to be set aside for future identifiable needs of a dependent child, 
and (ii) may, before disregarding the amounts referred to in sub- 
paragraph (A) and clause (i) of this subparagraph, disregard 
not more than $5 per month of any income; except that, with 
respect to any month, the State agency shall not disregard any 
earned income (other than income referred to in subparagraph 
(B))of- 

(C) any one of the persons specified in clause (ii) of subpara- 
graph (A) if such person — 

(i) terminated his employment or reduced his earned in- 
come without good cause within such period (of not less than 
30 days) preceding such month as may be prescribed by the 
Secretary; or 

(ii) refused without good cause, within such period pre- 
ceding such month as may be prescribed by the Secretary, to 
accept employment in which he is able to engage which is 
offered through the public employment offices of the State, or 
is otherwise offered by an employer if the offer of such em- 
ployer is determined by the State or local agency administer- 
ing the State plan, after notification by him, to be a bona fide 
offer of employment; or 

(D) any of such persons specified in clause (ii) of subpara- 
graph (A) if with respect to such month the income of the per- 



209 



Sec. 402(a) 



sons so specified (within the meaning of clause (7) ) was in excess 
of their need as determined by the State agency pursuant to 
clause (7) (without regard to clause (8) ), unless, for any one of 
the four months preceding such month, the needs of such person 
were met by the furnishing of aid under the plan; 1 

(9) provide safeguards which restrict the use of disclosure of 
information concerning applicants or recipients to purposes directly 
connected with (A) the administration of the plan of the State ap- 
proved under this part, the plan or program of the State under part 
B, C, or D of this title or under title I, X, XIV, XVI, XIX, or XX, 
or the supplemental security income program established by title XVI, 
(B) any investigation, prosecution, or criminal or civil proceeding, 
conducted in connection with the administration of any such plan or 
program, and (C) the administration of any other Federal or fed- 
erally assigned program which provides assistance, in cash or in kind, 
or services, directly to individuals on the basis of need ; and the safe- 
guards so provided shall prohibit disclosure, to any committee or a 
legislative body, of any information which identifies by name or 
address any such applicant or recipient ; 2 

(10) provide, effective July 1, 1951, that all individuals wishing to 
make application for aid to families with dependent children shall 
have opportunity to do so, and that aid to families with dependent 
children shall, subject to paragraphs (25) and (26), be furnished with 
reasonable promptness to all eligible individuals ; 3 

(11) provide for prompt notice (including the transmittal of all 
relevant information) to the State child support collection agency 
(established pursuant to part D of this title) of the furnishing of aid 
to families with dependent children with respect to a child who has 
been deserted or abandoned by a parent (including a child born out of 
wedlock without regard to whether the paternity of such child has 
been established) ; 3 

(12) provide, effective October 1, 1950, that no aid will be fur- 
nished any individual under the plan with respect to any period with 
respect to which he is receiving old-age assistance under the State 
plan approved under section 2 of this Act ; 

(13) [Repealed]. 4 

(14) [Repealed]. 4 

( 15 ) provide as part of the program of the State for the provision of 
services under title XX (A) for the development of a program, for 
each appropriate relative and dependent child receiving aid under the 
plan and for each appropriate individual (living in the same home as a 
relative and child receiving such aid) whose needs are taken into ac- 
count in making the determination under clause (7), for preventing 

1 See also section 101 (c) (1) of Public Law 93-647. 

2 Section 402(a) (9) was amended bv Public Laws 93-647 and 94-88. 

3 Sections 402(a) (10) and 402(a) (11) were amended by Public Law 93-647. 

4 See footnote 1 on p. 210. 



Sec. 402(a) 



210 



or reducing the incidence of births out of wedlock and otherwise 
strengthening family life, and for implementing such program by 
assuring that in all appropriate cases (including minors who can be 
considered to be sexually active) family planning services are offered 
to them and are provided promptly (directly or under arrangements 
with others) to all individuals voluntarily requesting such services, 
but acceptance of family planning services provided under the plan 
shall be voluntary on the part of such members and individuals and 
shall not be a prerequisite to eligibility for or the receipt of any other 
service under the plan; and (B) to the extent that services provided 
under this clause or clause (14) are furnished by the staff of the State 
agency or the local agency administering the State plan in each of the 
political subdivisions of the State, for the establishment of a single 
organizational unit in such State or local agency, as the case may be, 
responsible for the furnishing of such services ; 1 

(16) provide that where the State agency has reason to believe that 
the home in which a relative and child receiving aid reside is unsuit- 
able for the child because of the neglect, abuse, or exploitation of such 
child it shall bring such condition to the attention of the appropriate 
court or law enforcement agencies in the State, providing such data 
with respect to the situation it may have ; 

(17) [Repealed]. 

(18) [Repealed]. 

(19) provide — 

1 In the case ©f Guam, Puerto Rico, and the Virgin Islands, section 402(a) (13), (14), 

and (15) read as follows: 

"(13) provide a description of the services which the State agency makes available 
to maintain and strengthen family life for children, including a description of the steps 
taken to assure, in the provision of such services, maximum utilization of other agen- 
cies providing similar or related services ; 

"(14) provide for the development and application of a program for such family serv- 
ices as defined in section 406(d) and child welfare services, as defined in section 425, 
for each child and relative who receives aid to families with dependent children and 
each appropriate individual (living in the same home as a relative and child receiving 
such aid whose needs are taken into account in making the determination under clause 
(7)), as may be necessary in the light of the particular home conditions and other needs 
of such child, relative, and individuals, in order to assist such child, relative, and in- 
dividuals to attain or retain capability for self-support and care and in order to main- 
tain and strengthen family life and to foster child development ; 

"(15) provide (A) for the development of a program, for each appropriate relative and 
dependent child receiving aid under the plan and for each appropriate individual (living 
in the same home as a relative and child receiving such aid) whose needs are taken into 
account in making the determination under clause (7), for preventing or reducing the 
incidence of births out of wedlock and otherwise strengthening family life, and for 
implementing such program by assuring that in all appropriate cases (including minors 
who can be considered to be sexually active) family planning services are offered to 
them and are provided promptly (directly or under arrangements with others) to all 
individuals voluntarily requesting such services, but acceptance of family planning 
services provided under the plan shall be voluntary on the part of such members and 
individuals and shall not be a prerequisite to eligibility for or the receipt of any other 
service under the plan ; and (B) to the extent that services provided under this clause 
or clause (14) are furnished by the staff of the State agency or the local agency ad- 
ministering the State plan in each of the political subdivisions of the State, for the 
establishment of a single organizational unit in such State or local agency, as the case 
may be, responsible for the furnishing of such service ;". 



211 



Sec. 402(a) 



(A) that every individual, as a condition of eligibility for and 
under this part, shall register for manpower services, training, 
and employment as provided by regulations of the Secretary of 
Labor, unless such individual is — 

(i) a child who is under age 16 or attending school full 
time; 

(ii) a person who is ill, incapacitated, or of advanced age; 

(iii) a person so remote from a work incentive project 
that his effective participation is precluded ; 

(iv) a person whose presence in the home is required be- 
cause of illness or incapacity of another member of the house- 
hold; 

(v) a mother or other relative of a child under the age of 
six who is caring for the child ; or 

(vi) the mother or other female caretaker of a child, if 
the father or another adult male relative is in the home and 
not excluded by clause (i), (ii), (iii), or (iv) of this subpara- 
graph (unless he has failed to register as required by this 
subparagraph, or has been found by the Secretary of Labor 
under section 433(g) to have refused without good cause to 
participate under a work incentive program or accept 
employment as described in subparagraph (F) of this 
paragraph) ; 

and that any individual referred to in clause (v) shall be advised 
of her option to register, if she so desires, pursuant to this para- 
graph, and shall be informed of the child care services (if any) 
which will be available to her in the event she should decide so 
to register ; 

(B) that aid under the plan will not be denied by reason of 
such registration or the individual's certification to the Secretary 
of Labor under subparagraph (G) of this paragraph, or by 
reason of an individual's participation on a project under the 
program established by section 432(b) (2) or (3) ; 

(C) for arrangements to assure that there will be made a 
non-Federal contribution to the work incentive programs estab- 
lished by part C by appropriate agencies of the State or private 
organizations of 10 per centum of the cost of such programs, as 
specified in section 435(b) ; 

(D) that (i) training incentives authorized under section 
434, and income derived from a special work project under the 
program established by section 432(b)(3) shall be disregarded 
in determining the needs of an individual under section 402(a) 
(7), and (ii) in determining such individual's needs the addi- 
tional expenses attributable to his participation in a program 



Sec. 402(a) 



212 



established by section 432(b) (2) or (3) shall be taken into 
account ; 

(E) [Repealed]. 

(F) that if and for so long as any child, relative, or individual 
(certified to the Secretary of Labor pursuant to subparagraph 
(G) ) has been found by the Secretary of Labor under section 
433(g) to have refused without good cause to participate under a 
work incentive program established by part C with respect to 
which the Secretary of Labor has determined his participation is 
consistent with the purposes of such part C, or to have refused 
without good cause to accept employment in which he is able to 
engage which is offered through the public employment offices of 
the State, or is otherwise offered by an employer if the offer of 
such employer is determined, after notification by him, to be a 
bona fide offer of employment — 

(i) if the relative makes such refusal, such relative's 
needs shall not be taken into account in making the deter- 
mination under clause (7), and aid for any dependent child 
in the family in the form of payments of the type described 
in section 406(b) (2) (which in such a case shall be without 
regard to clauses (A) through (E) thereof) or section 408 
will be made ; 

(ii) aid with respect to a dependent child will be denied 
if a child who is the only child receiving aid in the family 
makes such refusal ; 

(iii) if there is more than one child receiving aid in 
the family, aid for any such child will be denied (and his 
needs will not be taken into account in making the deter- 
mination under clause (7) ) if that child makes such refusal; 
and 

(iv) if such individual makes such refusal, such individ- 
ual's needs shall not be taken into account in making the 
determination under clause (7) ; 

except that the State agency shall for a period of sixty days, make 
payments of the type described in section 406(b)(2) (without 
regard to clauses (A) through (E) thereof) on behalf of the rela- 
tive specified in clause (i), or continue aid in the case of a child 
specified in clause (ii) or (iii), or take the individual's needs into 
account in the case of an individual specified in clause (iv), but 
only if during such period such child, relative, or individual ac- 
cepts counseling or other services (which the State agency shall 
make available to such child, relative, or individual) aimed at 
persuading such relative, child, or individual, as the case may be, 



213 



Sec. 402(a) 



to participate in such program in accordance with the determina- 
tion of the Secretary of Labor ; and 

(G) that the State agency will have in effect a special program 
which (i) will be administered by a separate administrative unit 
and the employees of which will, to the maximum extent feasible, 
perform services only in connection with the administration of 
such program, (ii) will provide (through arrangements with 
others or otherwise) for individuals who have been registered 
pursuant to subparagraph (A), in accordance with the order of 
priority listed in section 433(a), such health, vocational rehabili- 
tation, counseling, child care, and other social and supportive 
services as are necessary to enable such individuals to accept em- 
ployment or receive manpower training provided under part C, 
and will, when arrangements have been made to provide necessary 
supportive services, including child care, certify to the Secretary 
of Labor those individuals who are ready for employment or train- 
ing under part C, (iii) will participate in the development of 
operational and employ ability plans under section 433 (b) ; and 
(iv) provides for purposes of clause (ii), that, when more than 
one kind of child care is available, the mother may choose the type, 
but she may not refuse to accept child care services if they are 
available ; 

(20) effective July 1, 1969, provide for aid to families with de- 
pendent children in the form of foster care in accordance with section 
408; 

(21) [Kepealed]. 

(22) [Kepealed]. 

(23) provide that by July 1, 1969, the amounts used by the State to 
determine the needs of individuals will have been adjusted to reflect 
fully changes in living costs since such amounts were established, and 
any maximums that the State imposes on the amount of aid paid to 
families will have been proportionatel} 7 adjusted ; 

(24) provide that if an individual is receiving benefits under title 
XVI, then, for the period for which such benefits are received, such 
individual shall not be regarded as a member of a family for purposes 
of determining the amount of the benefits of the family under this title 
and his income and resources shall not be counted as income and 
resources of a family under this title ; 

(25) provide (A) that, as a condition of eligibility under the plan, 
each applicant for or recipient of aid shall furnish to the State agency 
his social security account number (or numbers, if he has more than 
one such number), and (B) that such State agency shall utilize such 



Sec. 402(b) 



214 



account numbers, in addition to any other means of identification it 
may determine to employ in the administration of such plan ; 1 

(26) provide that, as a condition of eligibility for aid, each applicant 
or recipient will be required — 

(A) to assign the State any rights to support from any other 
person such applicant may have (i) in his own behalf or in behalf 
of any other family member for whom the applicant is applying 
for or receiving aid, and (ii) which have accrued at the time such 
assignment is executed, 

(B) to cooperate with the State (i) in establishing the pater- 
nity of a child born out of wedlock with respect to whom aid is 
claimed, and (ii) in obtaining support payments for such appli- 
cant and for a child with respect to whom such aid is claimed, or 
in obtaining any other payments or property due such applicant 
or such child, unless (in either case) such applicant or recipient is 
found to have good cause for refusing to cooperate as determined 
by the State agency in accordance with standards prescribed by 
the Secretary, which standards shall take into consideration the 
best interests of the child on whose behalf aid is claimed; and 
that, if the relative with whom a child is living is found to be 
ineligible because of failure to comply with the requirements of 
subparagraphs (A) and (B) of this paragraph, any aid for which 
such child is eligible will be provided in the form of protective 
payments as described in section 406(b) (2) (without regard to 
subparagraphs (A) through (E) of such section) ; 1 2 

(27) provide, that the State has in effect a plan approved under 
part D and operate a child support program in conformity with such 
plan; and 1 3 

(28) provide that, in determining the amount of aid to which an 
eligible family is entitled, any portion of the amounts collected in any 
particular month as child support pursuant to a plan approved under 
part D, and retained by the State under section 457, which (under the 
State plan approved under this part as in effect both during July 1975 
and during that particular month) would not have caused a reduction 
in the amount of aid paid to the family if such amounts had been paid 
directly to the family, shall be added to the amount of aid otherwise 
payable to such family under the State plan approved under this part. 4 

(b) The Secretary shall approve any plan which fulfills the condi- 
tions specified in subsection (a), except that he shall not approve any 
plan which imposes as a condition of eligibility for aid to families 

1 Sections 402(a) (25), 402(a) (26), and 402(a) (27) were added by Public Law 93-647. 

2 Section 402(a) (26) was amended bv Public Law 94-88. See also sections 201(a), 
201(b). and 208(d) of Public Law 94-88 printed in this document on pp. 736 and 737. 

3 Section 402(a) (27) was amended by Public Law 94-88. See also section 201(a) of 
Public Law 94-88. 

* Section 402(a) (28) added bv Public Law 94-88. 



215 



Sec. 403(a) 



with dependent children a residence requirement which denies aid 
with respect to any child residing in the State (1) who has resided in 
the State for one year immediately preceding the application for such 
aid, or (2) who was born within one year immediately preceding the 
application, if the parent or other relative with whom the child is liv- 
ing has resided in the State for one year immediately preceding the 
birth. 

(c) The Secretary shall, on the basis of his review of the reports 
received from the States under clause (15) of subsection (a), compile 
such data as he believes necessary and from time to time publish his 
findings as to the effectiveness of the programs developed and admin- 
istered by the States under such clause. The Secretary shall annually 
report to the Congress (with the first such report being made on or 
before July 1, 1970) on the programs developed and administered by 
each State under such clause (15). 

Payment to States 

Sec. 403. (a) From the sums appropriated therefor, the Secre- 
tary of the Treasury shall pay to each State which has an approved 
plan for aid and services to needy families with children, for each 
quarter, beginning with the quarter commencing October 1, 1958 — 
(1) in the case of any State other than Puerto Rico, the Virgin 
Islands, and Guam, an amount equal to the sum of the following 
proportions of the total amounts expended during such quarter 
as aid to families with dependent children under the State plan 
(including expenditures for premiums under part B of title 
XVIII for individuals who are recipients of money payments un- 
der such plan and other insurance premiums for medical or any 
other type of remedial care or the cost thereof) — 

(A) five-sixths of such expenditures, not counting so much 
of any expenditure with respect to any month as exceeds the 
product of $18 multiplied by the total number of recipients 
of aid to families with dependent children for such month 
(which total number, for purposes of this subsection, means 

(i) the number of individuals with respect to whom such aid 
in the form of money payments is paid for such month, plus 

(ii) the number of other individuals with respect to whom 
expenditures were made in such month as aid to families with 
dependent children in the form of medical or any other type 
of remedial care, plus (iii) the number of individuals, not 
counted under clause (i) or (ii), with respect to whom pay- 
ments described in section 406(b) (2) are made in such month 



Sec. 403(a) 



216 



and included as expenditures for purposes of this paragraph 
or paragraph (2) ) ; plus 

(B) the Federal percentage of the amount by which such 
expenditures exceed the maximum which may be counted 
under clause (A), not counting so much of any expenditure 
with respect to any month as exceeds (i) the product of $32 
multiplied by the total number of recipients of aid to families 
with dependent children (other than such aid in the form 
of foster care) for such month, plus (ii) the product of $100 
multiplied by the total number of recipients of aid to families 
with dependent children in the form of foster care for such 
month; and 

(2) in the case of Puerto Rico, the Virgin Islands, and Guam, 
an amount equal to one-half of the total of the sums expended 
during such quarter as aid to families with dependent children 
under the State plan (including expenditures for premiums under 
part B of Title XVIII for individuals who are recipients of 
money payments under such plan and other insurance premiums 
for medical or any other type of remedial care or the cost thereof) 
not counting so much of any expenditure with respect to any 
month as exceeds $18 multiplied by the total number of recipients 
of such aid for such month ; and 1 

(3) in the case of any State, an amount equal to the sum of 
the following proportions of the total amounts expended during 
such quarter as found necessary by the Secretary of Health, Edu- 
cation, and Welfare for the proper and efficient administration 
of the State plan — 

(A) 75 per centum of so much of such expenditures as are 
for the training (including both short- and long-term train- 
ing at educational institutions through grants to such insti- 
tutions or by direct financial assistance to students enrolled 
in such institutions) of personnel employed or preparing for 
employment by the State agency or by the local agency 
administering the plan in the political subdivision, and 

(B) one-half of the remainder of such expenditures, 
except that no payment shall be made with respect to amounts ex- 
pended in connection with the provision of any service described 
in section 2002(a) (1) of this Act other than services the provision of 



1 Pursuant to sec. 9 of the Act of April 19. 1950 (64 Stat. 44. 47), the Secretary of the 
Treasury must also pay to the States, In addition to the amounts produced by sec. 403(a) 
of the Social Security Act, an amount equal to 80 percent of the State share of assistance 
expenditures under the State plan with respect to Navajo and Hopl Indians. 



217 



Sec. 403(a) 



which is required by section 402(a) (19) to be included in the plan 
of the State ; and 1 

(4) [Repealed]. 



1 In the case of Guam, Puerto Rico, and the Virgin Islands, section 403(a)(3) reads 
as follows : 

"(3) in the case of any State, an amount equal to the sum of the following propor- 
tions of the total amounts expended during such quarter as found necessary by the 
Secretary of Health, Education, and Welfare for the proper and efficient administration 
of the State plan — 

"(A) 75 per centum of so much of such expenditures as are for — 

"(i) any of the services described in clauses (14) and (15) of section 402(a) 
which are provided to any child or relative who is receiving aid under the plan, 
or to any other individual (living in the same home as such relative and child) 
whose needs are taken into account in making the determination under clause 
(7) of such section, 

"(ii) any of the services described in clauses (14) and (15) of section 402(a) 
which are provided to any child or relative who is applying for aid to families 
with dependent children or who, within such period or periods as the Secre- 
tary may prescribe, has been or is likely to become an applicant for or recipient 
of such aid, 

"(iii) the training (including both short- and long-term training at educa- 
tional institutions through grants to such institutions or by direct financial 
assistance to students enrolled in such institutions) of personnel employed or 
preparing for employment by the State agency or by the local agency adminis- 
tering the plan in the political subdivision. 
"(B) one-half of the remainder of such expenditures. 
"The services referred to in subparagraph (A) shall include only — 

"(C) services provided by the staff of the State agency, or of the local agency 
administering the State plan in the political subdivision : Provided, That no funds 
authorized under this part shall be available for services defined as vocational re- 
habilitation services under the Vocational Rehabilitation Act (i) which are available 
to individuals in need of them under programs for their rehabilitation carried on 
under a State plan approved under such Act, or (ii) which the State agency or agen- 
cies administering or supervising the administration of the State plan approved 
under such Act are able and willing to provide if reimbursed for the cost thereof 
pursuant to agreement under subparagraph (D), if provided by such staff, and 

"(D) under conditions which shall be prescribed by the Secretary, services which 
in the judgment of the State agency cannot be as economically or as effectively pro- 
vided by the staff of such State or local agency and are not otherwise reasonably 
available to individuals in need of them, and which are provided, pursuant to agree- 
ment with the State agency, by the State health authority or the State agency or 
agencies administering or supervising the administration of the State plan for voca- 
tional rehabilitation services approved under the Vocational Rehabilitation Act or by 
any other State agency which the Secretary may determine to be appropriate (whether 
provided by its staff or by contract with public (local) or nonprofit private agencies) ; 
except that services described in clause (ii) of subparagraph (C) hereof may be provided 
only pursuant to agreement with such State agency or agencies administering or super- 
vising the administration of the State plan for vocational rehabilitation services so 
approved ; and except that, to the extent specified by the Secretary, child-welfare services, 
family planning services, and family services may be provided from sources other than 
those referred to in subparagraphs (C) and (D). The portion of the amount expended 
for administration of the State plan to which subparagraph (A) applies and the portion 
thereof to which subparagraph (B) applies shall be determined in accordance with such 
methods and procedures as may be permitted by the Secretary.". 

Section 248(b) of the Social Security Amendments of 1967 also applies: 

"(b) Notwithstanding subparagraphs (A) and (B) of section 403(a)(3) of such 
Act (as amended by this Act), the rate specified in such subparagraphs in the case of 
Puerto Rico, the Virgin Islands, and Guam, shall be 60 per centum (rather than 
75 or 85 per centum) " 



64-310 O - 76 - 15 



Sec. 403(b) 



218 



(5) in the case of any State, an amount equal to 50 per centum 
of the total amount expended under the State plan during such 
quarter as emergency assistance to needy families with children. 
The number of individuals with respect to whom payments de- 
scribed in section 406(b) (2) are made for any month, who may be 
included as recipients of aid to families with dependent children for 
purposes of paragraph (1) or (2), may not exceed 10 per centum of 
the number of other recipients of aid to families with dependent chil- 
dren for such month. In computing such 10 percent, there shall not 
be taken into account individuals with respect to whom such pay- 
ments are made for any month in accordance with section 402(a) (19) 
(F) or section 402(a) (26). 1 

(b) The method of computing and paying such amounts shall be 
as follows : 

(1) The Secretary of Health, Education, and Welfare shall, 
prior to the beginning of each quarter, estimate the amount to 
be paid to the State for such quarter under the provisions of 
subsection (a), such estimate to be based on (A) a report filed 
by the State containing its estimate of the total sum to be ex- 
pended in such quarter in accordance with the provisions of such 
subsection and stating the amount appropriated or made available 
by the State and its political subdivisions for such expenditures 
in such quarters, and if such amount is less than the State's pro- 
portionate share of the total sum of such estimated expenditures, 
the source or sources from which the difference is expected to be 
derived, (B) records showing the number of dependent children 
in the State, and (C) such other investigation as the Secretary 
may find necessary. 

(2) The Secretary of Health, Education, and Welfare shall 
then certify to the Secretary of the Treasury the amount so esti- 
mated by the Secretary of Health, Education, and Welfare, (A) 
reduced or increased, as the case may be, by any sum by which the 
Secretary of Health, Education, and Welfare finds that his esti- 
mate for any prior quarter was greater or less than the amount 
which should have been paid to the State for such quarter, and 
(B) reduced by a sum equivalent to the pro rata share to which 
the United States is equitably entitled, as determined by the Sec- 
retary of Health, Education, and Welfare, of the net amount re- 
covered during any prior quarter by the State or any political 
subdivision thereof with respect to aid to families with dependent 
children furnished under the State plan; except that such in- 
creases or reductions shall not be made to the extent that such 



1 Section 403(a) was amended by Public Law 94-88. 



219 



Sec. 403(f) 



sums have been applied to make the amount certified for any 
prior quarter greater or less than the amount estimated by the 
Secretary of Health, Education, and Welfare for such prior 
quarter. 

(3) The Secretary of the Treasury shall thereupon, through 
the Fiscal Service of the Treasury Department and prior to audit 
or settlement by the General Accounting Office, pay to the State, 
at the time or times fixed by the Secretary of Health, Education, 
and Welfare, the amount so certified. 

(c) Notwithstanding any other provision of this Act, the Federal 
share of assistance payments under this part shall be reduced with 
respect to any State for any fiscal year after June 30, 1973, by one per- 
centage point for each percentage point by which the number of indi- 
viduals certified, under the program of such State established pursuant 
to section 402(a) (19)(G),to the local employment office of the State 
as being ready for employment or training under part C, is less than 15 
per centum of the average number of individuals in such State who, 
during such year, are required to be registered pursuant to section 
402(a) (19) (A). 

(d) (1) Notwithstanding subparagraph (A) of subsection (a)(3) 
the rate specified in such subparagraph shall be 90 per centum (rather 
than 75 per centum) with respect to social and supportive services pro- 
vided pursuant to section 402(a) (19) (G) . 

(2) Of the sums authorized by section 401 to be appropriated for 
the fiscal year ending June 30, 1973, not more than $750,000,000 shall 
be appropriated to the Secretary for payments with respect to services 
to which paragraph ( 1 ) applies. 

(e) [Repealed]. 1 

(f) Notwithstanding any other provision of this section, the 
amount payable to any State under this part for quarters in a fiscal 
year shall with respect to quarters in fiscal years beginning after 
June 30, 1973, be reduced by 1 per centum (calculated without regard 
to any reduction under section 403(g) ) of such amount if such State — 

(1) in the immediately preceding fiscal year failed to carry 
out the provisions of section 402(a) (15) (B) as pertain to requir- 
ing the offering and arrangement for provision of family plan- 
ning services ; or 

1 In the case of Guam, Puerto Rico, and the Virgin Islands, section 403(e) reads as 
follows : 

"(e) Notwithstanding any other provision of subsection (a), with respect to expendi- 
tures during any calendar quarter beginning after December 31, 1972 (as found neces- 
sary by the Secretary for the proper and efficient administration of the plan) which are 
attributable to the offering, arranging, and furnishing, directly or on a contract basis, 
of family planning services and supplies, the amount payable to any State under this 
part shall be 90 per centum of such expenditures.". 



Sec. 403(g) 



220 



(2) in the immediately preceding fiscal year (but, in the case 
of the fiscal year beginning July 1, 1972, only considering the third 
and fourth quarters thereof) , failed to carry out the provisions of 
section 402(a) (15) (B) of the Social Security Act with respect 
to any individual who, within such period or periods as the Secre- 
tary may prescribe, has been an applicant for or recipient of aid 
to families with dependent children under the plan of the State 
approved under this part. 

(g) Notwithstanding any other provision of this section, the 
amount payable to any State under this part for quarters in a fiscal 
year shall with respect to quarters in fiscal years beginning after 
June 30, 1974, be reduced by 1 per centum (calculated without regard 
to any reduction under section 403(f) ) of such amount if such State 
fails to — 

(1) inform all families in the State receiving aid to families 
with dependent children under the plan of the State approved 
under this part of the availability of child health screening serv- 
ices under the plan of such State approved under title XIX, 

(2) provide or arrange for the provision of such screening 
services in all cases where they are requested, or 

(3) arrange for (directly or through referral to appropriate 
agencies, organizations, or individuals) corrective treatment the 
need for which is disclosed by such child health screening services. 

(h) Notwithstanding any other provision of this Act, the amount 
payable to any State under this part for quarters in a fiscal year shall 
with respect to quarters beginning after December 31, 1976, be reduced 
by 5 per centum of such amount if such State is found by the Secre- 
tary as the result of the annual audit to have failed to have an effective 
program meeting the requirements of section 402(a) (27) in any fiscal 
year beginning after September 30, 1976 (but, in the case of the fiscal 
year beginning October 1, 1976, only considering the second, third, 
and fourth quarters thereof) . 

Operation of State Plans 

Sec. 404. (a) In the case of any State plan for aid and services 
to needy families with children which has been approved by the Sec- 
retary of Health, Education, and Welfare, if the Secretary, after rea- 
sonable notice and opportunity for hearing to the State agency ad- 
ministering or supervising the administration of such plan, finds — 
(1) that the plan has been so changed as to impose any resi- 
dence requirement prohibited by section 402(b), or that in the 
administration of the plan any such prohibited requirement is 
imposed, with the knowledge of such State agency, in a substan- 
tial number of cases ; or 



221 



Sec. 405 



(2) that in the administration of the plan there is a failure to 
comply substantially with any provision required by section 402 
(a) to be included in the plan ; 
the Secretary shall notify such State agency that further payments 
will not be made to the State (or, in his discretion, that payments will 
be limited to categories under or parts of the State plan not affected 
by such failure) until the Secretary is satisfied that such prohibited 
requirement is no longer so imposed, and that there is no longer any 
such failure to comply. Until he is so satisfied he shall make no fur- 
ther payments to such State (or shall limit payments to categories 
under or parts of the State plan not affected by such failure). 

(b) No payment to which a State is otherwise entitled under this 
title for any period before September 1, 1962, shall be withheld by 
reason of any action taken pursuant to a State statute which requires 
that aid be denied under the State plan approved under this part with 
respect to a child because, of the conditions in the home in which the 
child resides ; nor shall any such payment be withheld for any period 
beginning on or after such date by reason of any action taken pursu- 
ant to such a statute if provision is otherwise made pursuant to a State 
statute for adequate care and assistance with respect to such child. 

(c) No State shall be found, prior to January 1, 1977, to have 
failed substantially to comply with the requirements of section 402 

(a) (27) if , in the judgment of the Secretary, such State is making a 
good faith effort to implement the program required by such section. 

(d) After December 31, 1976, in the case of any State which is 
found to have failed substantially to comply with the requirements of 
section 402(a) (27) , the reduction in any amount payable to such State 
required to be imposed under section 403(h) shall be imposed in lieu 
of any reduction, with respect to such failure, which would otherwise 
be required to be imposed under this section. 

Use of Payments for Benefit of Child 

Sec. 405. Whenever the State agency has reason to believe that 
any payments of aid to families with dependent children made with 
respect to a child are not being or may not be used in the best interests 
of the child, the State agency may provide for such counseling and 
guidance services with respect to the use of such payments and the 
management of other funds by the relative receiving such payments 
as it deems advisable in order to assure use of such payments in the 
best interests of such child, and may provide for advising such relative 
that continued failure to so use such payments will result in substitu- 
tion therefor of protective payments as provided under section 406 

(b) (2), or in seeking appointment of a guardian or legal representa- 



Sec. 406(a) 



222 



tive as provided in section 1111, or in the imposition of criminal or 
civil penalties authorized under State law if it is determined by a 
court of competent jurisdiction that such relative is not using or has 
not used for the benefit of the child any such payments made for that 
purpose; and the provision of such services or advice by the State 
agency (or the taking of the action specified in such advice) shall not 
serve as a basis for withholding funds from such State under section 
404 and shall not prevent such payments with respect to such child 
from being considered aid to families with dependent children. 

Definitions 
Sec. 406. When used in this part — 

(a) The term "dependent child" means a needy child (1) who has 
been deprived of parental support or care by reason of the death, con- 
tinued absence from the home, or physical or mental incapacity of a 
parent, and who is living with his father, mother, grandfather, grand- 
mother, brother, sister, stepfather, stepmother, stepbrother, stepsister, 
uncle, aunt, first cousin, nephew, or niece in a place of residence main- 
tained by one or more of such relatives as his or their own home, and 
(2) who is (A) under the age of eighteen, or (B) under the age of 
twenty-one and (as determined by the State in accordance with 
standards prescribed by the Secretary) a student regularly attending 
a school, college, or university, or regularly attending a course of 
vocational or technical training designed to fit him for gainful 
employment ; 

(b) The term "aid to families with dependent children" means 
money payments with respect to, or (if provided in or after the third 
month before the month in which the recipient makes application for 
aid) medical care in behalf of or any type of remedial care recognized 
under State law in behalf of, a dependent child or dependent children, 
and includes (1) money payments or medical care or any type of 
remedial care recognized under State law to meet the needs of the 
relative with whom any dependent child is living (and the spouse of 
such relative if living with him) and if such relative is the child's 
parent and the child is a dependent child by reason of the physical or 
mental incapacity of a parent or is a dependent child under section 
407), and (2) payments with respect to any dependent child (includ- 
ing payments to meet the needs of the relative, and the relative's 
spouse, with whom such child is living, and the needs of any other 
individual living in the same home if such needs are taken into account 
in making the determination under section 402(a) (7)) which do not 
meet the preceding requirements of this subsection but which would 
meet such requirements except that such payments are made to another 



223 



Sec. 406(e) 



individual who (as determined in accordance with standards prescribed 
by the Secretary) is interested in or concerned with the welfare of • 
such child or relative, or are made on behalf of such child or relative 
directly to a person furnishing food, living accommodations, or other 
goods, services, or items to or for such child, relative or other in- 
dividual, but only with respect to a State whose State plan approval 
under section 402 includes provision for — 

(A) determination by the State agency that the relative of the 
child with respect to whom such payments are made has such 
inability to manage funds that making payments to him would 
be contrary to the welfare of the child and, therefore, it is neces- 
sary to provide such aid with respect to such child and relative 
through payments described in this clause (2) ; 

(B) undertaking and continuing special efforts to develop 
greater ability on the part of the relative to manage funds in 
such manner as to protect the welfare of the family ; 

(C) periodic review by such State agency of the determination 
under clause (A) to ascertain whether conditions justifying such 
determination still exist, with provision for termination of such 
payments if they do not and for seeking judicial appointment of 
a guardian or other legal representative, as described in section 
1111, if and when it appears that the need for such payments is 
continuing, or is likely to continue, beyond a period specified 
by the Secretary ; 

(D) aid in the form of foster home care in behalf of children 
described in section 408(a) ; and 

(E) opportunity for a fair hearing before the State agency on 
the determination referred to in clause (A) for any individual 
with respect to whom it is made ; 

(c) The term "relative with whom any dependent child is living" 
means the individual who is one of the relatives specified in subsection 
(a) and with whom such child is living (within the meaning of such 
subsection) in a place of residence maintained by such individual 
(himself or together with any one or more of the other relatives so 
specified) as his (or their) own home. 

(d) [Repealed]. 1 

(e) (1) The term "emergency assistance to needy families with chil- 
dren" means any of the following, furnished for a period not in ex- 
cess of 30 days in any 12-month period, in the case of a needy child 

1 In the case of Guam, Puerto Rico, and the Virgin Islands, section 406(d) reads as 
follows : 

"(d) The term 'family services' means services to a family or any member thereof for 
the purposes of preserving, rehabilitating, reuniting, or strengthening the family, and 
such other services as will assist members of a family to attain or retain capability for 
the maximum self-support and personal independence.". 



Sec. 406(f) 



224 



under the age of 21, who is (or, within such period as may be specified 
by the Secretary, has been) living with any of the relatives specified 
in subsection (a)(1) in a place of residence maintained by one or more 
of such relatives as his or their own home, but only where such child 
is without available resources, the payments, care, or services involved 
are necessary to avoid destitution of such child or to provide living 
arrangements in a home for such child, and such destitution or need 
for living arrangements did not arise because such child or relative 
refused without good cause to accept employment or training for 
employment — 

(A) money payments, payments in kind, or such other pay- 
ments as the State agency may specify with respect to, or medical 
care or any other type of remedial care recognized under State 
law on behalf of, such child or any other member of the house- 
hold in which he is living, and 

(B) such services as may be specified by the Secretary; 

but only with respect to a State whose State plan approved under sec- 
tion 402 includes provision for such assistance. 

(2) Emergency assistance as authorized under paragraph (1) may 
be provided under the conditions specified in such paragraph to mi- 
grant workers with families in the State or in such part or parts 
thereof as the State shall designate. 

(f ) Notwithstanding the provisions of subsection (b) , the term "aid 
to families with dependent children" does not mean payments with 
respect to a parent (or other individual whose needs such State deter- 
mines should be considered in determining the need of the child or 
relative claiming aid under the plan of such State approved under this 
part) of a child who fails to cooperate with any agency or official of 
the State in obtaining such support payments for such child. Nothing 
in this subsection shall be construed to make an otherwise eligible 
child ineligible for protective payments because of the failure of such 
parent (or such other individual) to so cooperate. 

Dependent Children of Unemployed Fathers 

Sec. 407. (a) The term "dependent child" shall, notwithstand- 
ing section 406(a), include a needy child who meets the requirements 

of section 406(a) (2), who has been deprived of parental support or 

care by reason of the unemployment (as determined in accordance 

with standards prescribed by the Secretary) of his father, and who 

is living with any of the relatives specified in section 406(a)(1) in 

a place of residence maintained by one or more of such relatives as 

his (or their) own home. 

(b) The provisions of subsection (a) shall be applicable to a State 

if the State's plan approved under section 402 — 



225 



Sec. 407(c) 



(1) requires the payment cf aid to families with dependent 
children with respect to a dependent child as defined in subsection 
(a) when — 

(A) such child's father has not been employed (as deter- 
mined in accordance with the standards prescribed by the Sec- 
retary) for at least 30 days prior to the receipt of such aid, 

(B) such father has not without good cause, within such 
period (of not less than 30 days) as may be prescribed by the 
Secretary, refused a bona fide offer of employment or training 
for employment, and 

(C) (i) such father has 6 or more quarters of work (as 
defined in subsection (d)(1)) in any 13-calendar-quarter 
period ending within one year prior to the application for 
such aid or (ii) he received unemployment compensation 
under an unemployment compensation law of a State or of 
the United States, or he was qualified (within the meaning of 
subsection (d)(3)) for unemployment compensation under 
the unemployment compensation law of the State, within one 
year prior to the application for such aid ; and 

(2) provides — 

(A) for such assurances as will satisfy the Secretary that 
fathers of dependent children as defined in subsection (a) 
will be certified to the Secretary of Labor as provided in 
section 402(a) (19) within thirty days after receipt of aid 
with respect to such children ; 

(B) for entering into cooperative arrangements with the 
State agency responsible for administering or supervising the 
administration of vocational education in the State, designed 
to assure maximum utilization of available public vocational 
education services and facilities in the State in order to 
encourage the retraining of individuals capable of being 
retrained ; and 

(C) for the denial of aid to families with dependent chil- 
dren to any child or relative specified in subsection (a) — 

(i) if, and for so long as, such child's father is not 
currently registered with the public employment offices 
in the State, and 

(ii) with respect to any week for which such child's 
father receives unemployment compensation under an 
unemployment compensation law of a State or of the 
United States. 

(c) Notwithstanding any other provisions of this section, expendi- 
tures pursuant to this section shall be excluded from aid to families 
with dependent children (A) where such expenditures are made under 



Sec. 407(d) 



226 



the plan with respect to any dependent child as defined in subsection 
(a) , (i) for any part of the 30-day period referred to in subparagraph 

(A) of subsection (b) (1), or (ii) for any period prior to the time 
when the father satisfies subparagraph (B) of such subsection, and 

(B) if, and for as long as, no action is taken (after the 30-day period 
referred to in paragraph (A) of subsection (b) (2)), under the pro- 
gram therein specified, to certify such father to the Secretary of Labor 
pursuant to section 402 ( a ) ( 19 ) . 

(d) For purposes of this section — 

(1) the term "quarter of work" with respect to any individual 
means a calendar quarter in which such individual received earned 
income of not less than $50 (or which is a "quarter of coverage" 
as defined in section 213(a)(2)), or in which such individual 
participated in a community work and training program under 
section 409 or any other work and training program subject to the 
limitations in section 409, or the work incentive program estab- 
lished under part C ; 

(2) the term "calendar quarter" means a period of 3 consecu- 
tive calendar months ending on March 31, June 30, Septem- 
ber 30, or December 31 ; and 

(3) an individual shall be deemed qualified for unemployment 
compensation under the State's unemployment compensation law 
if— 

(A) he would have been eligible to receive such unemploy- 
ment compensation upon filing application, or 

(B) he performed work not covered under such law and 
such work, if it had been covered, would (together with any 
covered work he performed) have made him eligible to 
receive such unemployment compensation upon filing 
application. 

Federal Payments for Foster Home Care of Dependent Children 

Sec. 408. Effective for the period beginning May 1, 1961 — 
(a) The term "dependent child" shall, notwithstanding section 
406(a), also include a child (1) who would meet the requirements of 
such section 406(a) or of section 407, except for his removal after 
April 30, 1961, from the home of a relative (specified in such section 
406(a) ) as a result of a judicial determination to the effect that con- 
tinuation therein would be contrary to the welfare of such child, (2) 
whose placement and care are the responsibility of (A) the State or 
local agency administering the State plan approved under section 
402, or (B) any other public agency with whom the State agency ad- 
ministering or supervising the administration of such State plan has 
made an agreement which is still in effect and which includes provi- 
sion for assuring development of a plan, satisfactory to such State 



227 



Sec. 408(f) 



agency, for such child as provided in paragraph (f)(1) and such 
other provisions as may be necessary to assure accomplishment of the 
objectives of the State plan approved under section 402, (3) who has 
been placed in a foster family home or child-care institution as a re- 
sult of such determination, and (4) who (A) received aid under such 
State plan in or for the month in which court proceedings leading to 
such determination were initiated, or (B) (i) would have received 
such aid in or for such month if application had been made therefor, 
or (ii) in the case of a child who had been living with a relative 
specified in section 406(a) within six months prior to the month in 
which such proceedings were initiated, would have received such aid 
in or for such month if in such month he had been living with (and 
removed from the home of) such a relative and application had been 
made therefor ; 

(b) the term "aid to families with dependent children" shall, not- 
withstanding section 406(b), include also foster care in behalf of a 
child described in paragraph (a) of this section — 

(1) in the foster family home of any individual, whether the 
payment therefor is made to such individual or to a public or 
nonprofit private child-placement or child-care agency, or 

(2) in a child-care institution, whether the payment therefor 
is made to such institution or to a public or nonprofit private 
child-placement or child-care agency, but subject to limitations 
prescribed by the Secretary with a view to including as "aid to 
families with dependent children" in the case of such foster care 
in such institutions only those items which are included in such 
term in the case of foster care in the foster family home of an 
individual ; 

(c) the number of individuals counted under clause (A) of sec- 
tion 403(a)(1) for any month shall include individuals (not other- 
wise included under such clause) with respect to whom expenditures 
were made in such month as aid to families with dependent children 
in the form of foster care ; and 

(d) services described in paragraph (f ) (2) of this section shall be 
considered as part of the administration of the State plan for purposes 
of section 403(a)(3); 

but only with respect to a State whose State plan approved under 
section 402 — 

(e) includes aid for any child described in paragraph (a) of this 
section, and 

(f ) includes provision for (1) development of a plan for each such 
child (including periodic review of the necessity for the child's being 
in a foster family home or child-care institution) to assure that 
he receives proper care and that services are provided which are de- 



Sec. 409(a) 228 

signed to improve the conditions in the home from which he was re- 
moved or to otherwise make possible his being placed in the home of a 
relative specified in section 406(a), and (2) use by the State or local 
agency administering the State plan, to the maximum extent practi- 
cable, in placing such a child in a foster family home or child-care 
institution, of the services of employees, of the State public-welfare 
agency referred to in section 522(a) (relating to allotments to States 
for any child welfare services under part 3 of title V) or any local 
agency participating in the administration of the plan referred to in 
such section, who perform functions in the administration of such 
plan. 

For the purposes of this section, the term "foster family home" 
means a foster family home for children which is licensed by the State 
in which it is situated or has been approved, by the agency of such 
State responsible for licensing homes of this type as meeting the stand- 
ards established for such licensing; and the term "child-care institu- 
tion" means a nonprofit private child-care institution which is licensed 
by the State in which it is situated or has been approved, by the agency 
of such State responsible for licensing or approval of institutions of 
this type, as meeting the standards established for such licensing. 

Community Work and Training Programs 

Sec. 409. (a) For the purpose of assisting the States in encour- 
aging, through community work and training programs of a construc- 
tive nature, the conservation of work skills and the development of 
new skills for individuals who have attained the age of 18 and are 
receiving aid to families with dependent children, under conditions 
which are designed to assure protection of the health and welfare of 
such individuals and the dependent children involved, expenditures 
(other than for medical or any other type of remedial care) for any 
month with respect to a dependent child (including payments to meet 
the needs of any relative or relatives, specified in section 406(a), with 
whom he is living) under a State plan approved under section 402 
shall not be excluded from aid to families with dependent children 
because such expenditures are made in the form of payments for 
work performed in such month by any one or more of the relatives 
with whom such child is living if such work is performed for the 
State agency or any other public agency under a program (which 
need not be in effect in all political subdivisions of the State) admin- 
istered by or under the supervision of such State agency, if there is 
State financial participation in such expenditures, and if such State 
plan includes — 

(1) provisions which, in the judgment of the Secretary, pro- 
vide reasonable assurance that — 



229 



Sec. 409(a) 



(A) appropriate standards for health, safety, and other 
conditions applicable to the performance of such work by 
such relatives are established and maintained ; 

(B) payments for such work are at rates not less than 
the minimum rate (if any) provided by or under State law 
for the same type of work and not less than the rates prevail- 
ing on similar work in the community ; 

(C) such work is performed on projects which serve a 
useful public purpose, do not result either in displacement of 
regular workers or in the performance by such relatives of 
work that would otherwise be performed by employees of 
public or private agencies, institutions, or organizations, and 
(except in cases of projects which involve emergencies or 
which are generally of a nonrecurring nature) are of a type 
which has not normally been undertaken in the past by the 
State or community, as the case may be ; 

(D) in determining the needs of any such relative, any 
additional expenses reasonably attributable to such work will 
be considered; 

(E) any such relative shall have reasonable opportunities 
to seek regular employment and to secure any appropriate 
training or retraining which may be available; 

(F) any such relative will, with respect to the work so per- 
formed, be covered under the State workmen's compensation 
law or be provided comparable protection ; and 

(G) aid under the plan will not be denied with respect to 
any such relative (or the dependent child) for refusal by such 
relative to perform any such work if he has good cause for 
such refusal ; 

(2) provision for entering into cooperative arrangements with 
the system of public employment offices in the State looking to- 
ward employment or occupational training of any such relatives 
performing work under such program, including appropriate pro- 
vision for registration and periodic reregistration of such relatives 
and for maximum utilization of the job placement services and 
other services and facilities of such offices ; 

(3) provision for entering into cooperative arrangements with 
the State agency or agencies responsible for administering or su- 
pervising the administration of vocational education and adult 
education in the State, looking toward maximum utilization of 
available public vocational or adult education services and facili- 
ties in the State in order to encourage the training or retraining 
of any such relatives performing work under such program and 
otherwise assist them in preparing for regular employment ; 



Sec. 409(b) 



230 



(4) provision for assuring appropriate arrangements for the 
care and protection of the child during the absence from the home 
of any such relative performing work under such program in 
order to assure that such absence and work will not be inimical 
to the welfare of the child ; 

(5) provision that there be no adjustment or recovery by the 
State or any political subdivision thereof on account of an}- pay- 
ments which are correctly made for such work ; and 

(6) such other provisions as the Secretary finds necessary to 
assure that the operation of such program will not interfere with 
achievement of the objectives set forth in section 401. 

(b) In the case of any State which makes expenditures in the form 
described in subsection (a) under its State plan approved under sec- 
tion 402, the proper and efficient administration of the State plan, for 
purposes of section 403(a) (3) and (4) may not include the cost of 
making or acquiring materials or equipment in connection with the 
work performed under a program referred to in subsection (a) or the 
cost of supervision of work under such program, and may include only 
such other costs attributable to such programs as are permitted by the 
Secretary. 1 

Sec. 410. [Repealed.] 

Part B — Child-Welfare Services 
Appropriation 

Sec. 420. For the purpose of enabling the United States, through 
the Secretary, to cooperate with State public welfare agencies in 
establishing, extending, and strengthening child-welfare services, the 
following sums are hereby authorized to be appropriated : $196,000,000 
for the fiscal year ending June 30, 1973, $211,000,000 for the fiscal year 
ending June 30, 1974, $226,000,000 for the fiscal year ending June 30, 
1975, $246,000,000 for the fiscal year ending June 30, 1976, and $266,- 
000,000 for each fiscal year thereafter. 

Allotments to States 

Sec. 421. The sum appropriated pursuant to section 420 for each 
fiscal year shall be allotted by the Secretary for use by cooperating 
State public welfare agencies which have plans developed jointly by 
the State agency and the Secretary, as follows : He shall allot $70,000 
to each State, and shall allot to each State an amount which bears the 
same ratio to the remainder of the sum so appropriated for such year 

1 P.L. 90-248, sec. 204(c) (2) provides : 

"The provisions of section 409 of the Social Security Act shall not apply to any State 
with respect to any quarter beginning after June 30, 1968." 



231 Sec. 422(a) 

as the product of (1) the population of such State under the age of 
21 and (2) the allotment percentage of such State (as determined 
under section 423) bears to the sum of the corresponding products 
of all the States. 

Payment to States 

Sec. 422. (a) From the sums appropriated therefor and the 
allotment available under this part, the Secretary shall from time to 
time pay to each State — 

(1) that has a plan for child- welfare services which has been 
developed as provided in this part and which — 

(A) provides that (i) the individual or agency designated 
pursuant to section 2003 (d) (1) (C) to administer or super- 
vise the administration of the State's services program will 
administer or supervise the administration of such plan for 
child- welf are services and (ii) to the extent that child- welfare 
services are furnished by the staff of the State agency or local 
agency administering such plan for child- welf are services, a 
single organizational unit in such State or local agency, as the 
case may be, will be responsible for furnishing such child- 
welfare services, 1 

(B) provides for coordination between the services pro- 
vided under such plan and the services provided for depend- 
ent children under the State plan approved under part A 
of this title, with a view to provision of welfare and related 
services which will best promote the welfare of such children 
and their families, and 

(C) provides, with respect to day care services (includ- 
ing the provision of such care) provided under this title — 

(i) for cooperative arrangements with the State 
health authority and the State agency primarily respon- 
sible for State supervision of public schools to assure 
maximum utilization of such agencies in the provision of 
necessary health services and education for children re- 
ceiving day care, 

(ii) for an advisory committee, to advise the State 
public welfare agency on the general policy involved in 
the provision of day care services under the plan, which 



1 In the case of Guam, Puerto Rico, and the Virgin Islands, section 422(a)(1) (A) reads 
as follows : 

"(A) provides that (i) the State agency designated pursuant to section 402(a)(3) to 
administer or supervise the administration of the plan of the State approved under part 
A of this title will administer or supervise the administration of such plan for child- 
welfare services and (ii) to the extent that child-welfare services are furnished by the 
staff of the State agency or local agency administering such plan for child-welfare serv- 
ices, the organizational unit in such State or local agency established pursuant to sec- 
tion 402(a) (15) will be responsible for furnishing such child-welfare services,". 



Sec. 422(a) 



232 



shall include among its members representatives of other 
State agencies concerned with day care or services related 
thereto and persons representative of professional or 
civic or other public or nonprofit private agencies, orga- 
nizations, or groups concerned with the provision of day 
care, 

(iii) for such safeguards as may be necessary to as- 
sure provision of day care under the plan only in cases in 
which it is in the best interest of the child and the mother 
and only in cases in which it is determined, under criteria 
established by the State, that a need for such care exists ; 
and, in cases in which the family is able to pay part or 
all of the costs of such care, for payment of such fees as 
may be reasonable in the light of such ability, 

(iv) for giving priority, in determining the existence 
of need for such day care, to members of low-income or 
other groups in the population, and to geographical 
areas, which have the greatest relative need for extension 
of such day care, and 

(v) that day care provided under the plan will be 
provided only in facilities (including private homes) 
which are licensed by the State, or approved (as meeting 
the standards established for such licensing) by the State 
agency responsible for licensing facilities of this type, 
and 

(vi) for the development and implementation of ar- 
rangements for the more effective involvement of the 
parent or parents in the appropriate care of the child 
and the improvement of the health and development of 
the child, and 

(2) that makes a satisfactory showing that the State is extend- 
ing the provision of child-welfare services in the State, with 
priority being given to communities with the greatest need for 
such services after giving consideration to their relative financial 
need, and with a view to making available by July 1, 1975, in 
all political subdivisions of the State, for all children in need 
thereof, child- welfare services provided by the staff (which shall 
to the extent feasible be composed of trained child-welfare per- 
sonnel) of the State public welfare agency or of the local agency 
participating in the administration of the plan in the political 
subdivision, 

except that (effective July 1, 1969, or, if earlier, on the date as of 
which the modification of the State plan to comply with this require- 
ment with respect to subprofessional staff is approved) such plan 



233 



Sec. 422(c) 



shall provide for the training and effective use of paid subprof essional 
staff with particular emphasis on the full-time or part-time employ- 
ment of persons of low income, as community service aides, in the 
administration of the plan and for the use of nonpaid or partially 
paid volunteers in providing services and in assisting any advisory 
committees established by the State agency, an amount equal to the 
Federal share (as determined under section 423) of the total sum 
expended under such plan (including the cost of administration of 
the plan) in meeting the costs of State, district, county, or other local 
child- welfare services, in developing State services for the encourage- 
ment and assistance of adequate methods of community child- welfare 
organization, in paying the costs of returning any runaway child who 
has not attained the age of eighteen to his own community in another 
State, and of maintaining such child until such return (for a period 
not exceeding fifteen days), in cases in which such costs cannot be met 
by the parents of such child or by any person, agency, or institution 
legally responsible for the support of such child. In developing such 
services for children, the facilities and experience of voluntary agen- 
cies shall be utilized in accordance with child-care programs and ar- 
rangements in the State and local communities as may be authorized 
by the State. 

(b) The method of computing and paying such amounts shall be as 
follows : 

(1) The Secretary shall, prior to the beginning of each period 
for which a payment is to be made, estimate the amount to be paid 
to the State for such period under the provisions of subsection (a) . 

(2) From the allotment available therefor, the Secretary shall 
pay the amount so estimated, reduced or increased, as the case may 
be, by any sum (not previously adjusted under this section) by 
which he finds that his estimate of the amount to be paid the State 
for any prior period under this section was greater or less than 
the amount which should have been paid to the State for such 
prior period under this section. 

(c) If on December 1, 1974, the agency of a State administering its 
plan under this part was not the agency designated pursuant to section 
402(a) (3), subsection (a) (1) (A) of this section shall not apply with 
respect to such agency but only so long as such agency is not the 
agency designated under section 2003(d) (1) (C), and if on December 
1, 1974, the local agency administering the plan of a State under this 
part in a subdivision of the State is not the local agency in such sub- 
division administering the plan of such State under part A of this 
title, subsection (a) (1) (A) of this section shall not apply with respect 
to such local agency but only so long as such local agency is not the 



64-310 O - 76 - 16 



Sec. 423(a) 



234 



local agency administering the program of the State for the provision 
of services under title XX. 

Allotment Percentage and Federal Share 

Sec. 423. (a) The "allotment percentage" for any State shall 
be 100 per centum less the State percentage ; and the State percentage 
shall be the percentage which bears the same ratio to 50 per centum as 
the per capita income of such State bears to the per capita income of 
the United States; except that (1) the allotment percentage shall in 
no case be less than 30 per centum or more than 70 per centum, and 
(2) the allotment percentage shall be 70 per centum in the case of 
Puerto Rico, the Virgin Islands, and Guam. 

(b) The "Federal share" for any State for any fiscal year shall be 
100 per centum less that percentage which bears the same ratio to 
50 per centum as the per capita income of such States bears to the per 
capita income of the United States, except that (1) in no case shall 
the Federal share be less than 33% per centum or more than 66% per 
centum, and (2) the Federal share shall be 66% per centum in the case 
of Puerto Rico, the Virgin Islands, and Guam. 

(c) The Federal share and allotment percentage for each State 
shall be promulgated by the Secretary between July 1 and August 
31 of each even-numbered year, on the basis of the average per capita 
income of each State and of the United States for the three most 
recent calendar years for which satisfactory data are available from 
the Department of Commerce. Such promulgation shall be conclusive 
for each of the two fiscal years in the period beginning July 1 next 
succeeding such promulgation : Provided, That the Federal shares and 
allotment percentages promulgated under section 524(c) of the Social 
Security Act in 1966 shall be effective for purposes of this section for 
the fiscal years ending June 30, 1968, and June 30, 1969. 

(d) For purposes of this section, the term "United States" means 
the fifty States and the District of Columbia. 

Reallotment 

Sec. 424. The amount of any allotment to a State under section 
421 for any fiscal year which the State certifies to the Secretary will 
not be required for carrying out the State plan developed as provided 
in such section shall be available for reallotment from time to time, on 
such dates as the Secretary may fix, to other States which the Secre- 
tary determines (1) have need in carrying out their State plans so 
developed for sums in excess of those previously allotted to them under 
that section and (2) will be able to use such excess amounts during such 
fiscal year. Such reallotments shall be made on the basis of the State 



235 



Sec. 426(a) 



plans so developed, after taking into consideration the population 
under the age of twenty-one, and the per capita income of each such 
State as compared with the population under the age of twenty-one, 
and the per capita income of all such States with respect to which such 
a determination by the Secretary has been made. Any amount so real- 
lotted to a State shall be deemed part of its allotment under section 
421. 

Definition 

Sec. 425. For purposes of this title, the term "child-welfare 
services" means public social services which supplement, or substitute 
for, parental care and supervision for the purpose of ( 1 ) preventing or 
remedying, or assisting in the solution of problems which may result 
in, the neglect, abuse, exploitation, or delinquency of children, (2) 
protecting and caring for homeless, dependent, or neglected children, 
(3) protecting and promoting the welfare of children of working 
mothers, and (4) otherwise protecting and promoting the welfare of 
children, including the strengthening of their own homes where pos- 
sible or, where needed, the provision of adequate care of children 
away from their homes in foster family homes or day-care or other 
child-care facilities. 

Research, Training, or Demonstration Projects 

Sec. 426. (a) There are hereby authorized to be appropriated for 
each fiscal year such sums as the Congress may determine — 
(1) for grants by the Secretary — 

(A) to public or other nonprofit institutions of higher 
learning, and to public or other nonprofit agencies and or- 
ganizations engaged in research or child- welfare activities, 
for special research or demonstration projects in the field of 
child welfare which are of regional or national significance 
and for special projects for the demonstration of new meth- 
ods or facilities which show promise of substantial contri- 
bution to the advancement of child welfare ; 

(B) to State or local public agencies responsible for admin- 
istering, or supervising the administration of, the plan under 
this part, for projects for the demonstration of the utilization 
of research (including findings resulting therefrom) in the 
field of child welfare in order to encourage experimental and 
special types of welfare services; and 

(C) to public or other nonprofit institutions of higher 
learning for special projects for training personnel for work 
in the field of child welfare, including traineeships with 



Sec. 426(b) 



236 



such stipends and allowances as may be permitted by the 
Secretary; and 

(2) for contracts or jointly financed cooperative arrangements 
with States and public and other organizations and agencies for 
the conduct of research, special projects, or demonstration proj- 
ects relating to such matters, 
(b) Payments of grants or under contracts or cooperative arrange- 
ments under this section may be made in advance or by way of reim- 
bursement, and in such installments, as the Secretary may determine ; 
and shall be made on such conditions as the Secretary finds neces- 
sary to carry out the purposes of the grants, contracts, or other 
arrangements. 

Part C — Work Incentive Program for Recipients of Aid Under 

State Plan Approved Under Part A 

Purpose 

Sec. 430. The purpose of this part is to require the establishment 
of a program utilizing all available manpower services, including 
those authorized under other provisions of law, under which in- 
dividuals receiving aid to families with dependent children will be 
furnished incentives, opportunities, and necessary services in order for 
(1) the employment of such individuals in the regular economy, (2) 
the training of such individuals for work in the regular economy, and 
(3) the participation of such individuals in public service employ- 
ment, thus restoring the families of such individuals to independence 
and useful roles in their communities. It is expected that the individ- 
uals participating in the program established under this part will 
acquire a sense of dignity, self- worth, and confidence which will flow 
from being recognized as a wage-earning member of society and that 
the example of a working adult in these families will have beneficial 
effects on the children in such families. 

Appropriation 

Sec. 431. (a) There is hereby authorized to be appropriated to 
the Secretary of Health, Education, and Welfare for each fiscal year a 
sum sufficient to carry out the purposes of this part. The Secretary of 
Health, Education, and Welfare shall transfer to the Secretary of 
Labor from time to time sufficient amounts, out of the moneys appro- 
priated pursuant to this section, to enable him to carry out such 
purposes. 

(b) Of the amounts expended from funds appropriated pursuant 
to subsection (a) for any fiscal year (commencing with the fiscal year 



237 



Sec. 432(b) 



ending June 30, 1973), not less than 33% per centum thereof shall be 
expended for carrying out the program of on-the-job training referred 
to in section 432(b) (1) (B) and for carrying out the program of pub- 
lic service employment referred to in section 432(b) (3). 

(c) Of the sums appropriated pursuant to subsection (a) to carry 
out the provisions of this part for any fiscal year (commencing with 
the fiscal year ending June 30, 1973), not less than 50 percent shall be 
allotted among the States in accordance with a formula under which 
each State receives (from the total available for such allotment) an 
amount which bears the same ratio to such total as — 

(1) in the case of the fiscal year ending June 30, 1973, and the 
fiscal year ending J une 30, 1974, the average number of recipients 
of aid to families with dependent children in such State during 
the month of January last preceding the commencement of such 
fiscal year bears to the average number of such recipients during 
such month in all the States ; and 

(2) in the case of the fiscal year ending June 30, 1975, or in the 
case of any fiscal year thereafter, the average number of individ- 
uals in such State who, during the month of J anuary last preced- 
ing the commencement of such fiscal year, are registered pursuant 
to section 402(a) (19) (A) bears to the average number of individ- 
uals in all States who, during such month, are so registered. 

Establishment of Programs 

Sec. 432. (a) The Secretary of Labor (hereinafter in this part 
referred to as the Secretary) shall, in accordance with the provisions 
of this part, establish work incentive programs (as provided for in 
subsection (b) of this section) in each State and in each political 
subdivision of a State in which he determines there is a significant 
number of individuals who have attained age 16 and are receiving 
aid to families with dependent children. In other political subdivi- 
sions, he shall use his best efforts to provide such programs either 
within such subdivisions or through the provision of transportation 
for such persons to political subdivisions of the State in which such 
programs are established. 

(b) Such programs shall include, but shall not be limited to, (1) 
(A) a program placing as many individuals as is possible in employ- 
ment, and (B) a program utilizing on-the-job training positions for 
others, (2) a program of institutional and work experience training 
for those individuals for whom such training is likely to lead to regu- 
lar employment, and (3) a program of public service employment 
for individuals for whom a job in the regular economy cannot be 
found. 



Sec. 432(c) 



238 



(c) In carrying out the purposes of this part the Secretary may 
make grants to, or enter into agreements with, public or private agen- 
cies or organizations (including Indian tribes with respect to Indians 
on a reservation), except that no such grant or agreement shall be 
made to or with a private employer for profit or with a private non- 
profit employer not organized for a public purpose for purposes of the 
work experience program established by clause (2) of subsection (b). 

(d) In providing the manpower training and employment services 
and opportunities required by this part, the Secretary of Labor shall, 
to the maximum extent feasible, assure that such services and opportu- 
nities are provided by using all authority available to him under this 
or any other Act. In order to assure that the services and opportunities 
so required are provided, the Secretary of Labor shall use the funds 
appropriated to him under this part to provide programs required by 
this part through such other Act, to the same extent and under the 
same conditions (except as regards the Federal matching percentage) 
as if appropriated under such other Act and, in making use of the 
programs of other Federal, State, or local agencies (public or pri- 
vate) , the Secretary of Labor may reimburse such agencies for services 
rendered to persons under this part to the extent such services and 
opportunities are not otherwise available on a nonreimbursable basis. 

(e) The Secretary shall take appropriate steps to assure that the 
present level of manpower services available under the authority of 
other statutes to recipients of aid to families with dependent children 
is not reduced as a result of programs under this part. 

(f ) (1) The Secretary of Labor shall establish in each State, munic- 
ipality, or other appropriate geographic area with a significant num- 
ber of persons registered pursuant to section 402(a) (19) (A) a Labor 
Market Advisory Council the function of which will be to identify 
and advise the Secretary of the types of jobs available or likely to 
become available in the area served by the Council ; except that if there 
is already located in any area an appropriate body to perform such 
function, the Secretary may designate such body as the Labor Market 
Advisory Council for such area. 

(2) Any such Council shall include representatives of industry, 
labor, and public service employers from the area to be served by the 
Council. 

(3) The Secretary shall not conduct, in any area, institutional 
training under any program established pursuant to subsection (b) of 
any type which is not related to jobs of the type which are or are 
likely to become available in such area as determined by the Secretary 
after taking into account information provided by the Labor Market 
Advisory Council for such area. 



239 



Sec. 433(b) 



Operation of Program 

Sec. 433. (a) The Secretary shall provide a program of testing 
and counseling for all persons certified to him by a State, pursuant to 
section 402(a) (19) (G), and shall select those persons whom he finds 
suitable for the programs established by clauses (1) and (2) of section 
432(b) . Those not so selected shall be deemed suitable for the program 
established by clause (3) of such section 432(b) unless the Secretary 
finds that there is good cause for an individual not to participate in 
such program. The Secretary, in carrying out such program for in- 
dividuals certified to him under section 402(a) (19) (G), shall accord 
priority to such individuals in the following order, taking into account 
employability potential: first, unemployed fathers; second, mothers, 
whether or not required to register pursuant to section 402(a) (19) 
( A) , who volunteer for participation under a work incentive program ; 
third, other mothers, and pregnant women, registered pursuant to sec- 
tion 402(a) (19) (A), who are under 19 years of age; fourth, depend- 
ent children and relatives who have attained age 16 and who are not 
in school or engaged in work or manpower training; and fifth, all 
other individuals so certified to him. 

(b) (1) For each State the Secretary shall develop jointly with the 
administrative unit of such State administering the special program 
referred to in section 402(a) (19) (G) a statewide operational plan. 

(2) The statewide operational plan shall prescribe how the work 
incentive program established by this part will be operated at the local 
level, and shall indicate (i) for each area within the State the num- 
ber and type of positions which will be provided for training, for 
on-the-job training, and for public service employment, (ii) the man- 
ner in which the information provided by the Labor Market Advisory 
Council (established pursuant to section 432(f)) for any such area 
will be utilized in the operation of such program, and (iii) the par- 
ticular State agency or administrative unit thereof which will be 
responsible for each of the various activities and functions to be per- 
formed under such program. Any such operational plan for any State 
must be approved by the Secretary, the administrative unit of such 
State administering the special program referred to in section 402(a) 
(19) (G), and the regional joint committee (established pursuant to 
section 439) for the area in which such State is located. 

(3) The Secretary shall develop an employability plan for each 
suitable person certified to him under section 402(a) (19) (G) which 
shall describe the education, training, work experience, and orienta- 
tion which it is determined that such person needs to complete in 
order to enable him to become self-supporting. 



Sec. 433(c) 



240 



(c) The Secretary shall make maximum use of services available 
from other Federal and State agencies and, to the extent not other- 
wise available on a nonreimbursable basis, he may reimburse such 
agencies for services rendered to persons under this part. 

(d) To the extent practicable and where necessary, work incentive 
programs established by this part shall include, in addition to the 
regular counseling, testing, referral available through the Federal- 
State Employment Service System, program orientation, basic educa- 
tion, training in communications and employability skills, work 
experience, institutional training, on-the-job training, job develop- 
ment, and special job placement and folio wup services, required to 
assist participant in securing and retaining employment and securing 
possibilities for advancement. 

(e) (1) In order to develop public service employment under the 
program established by section 432(b) (3), the Secretary shall enter 
into agreements with (A) public agencies, (B) private nonprofit or- 
ganizations established to serve a public purpose, and (C) Indian 
tribes with respect to Indians on a reservation, under which individ- 
uals deemed suitable for participation in such a program will be pro- 
vided work which serves a useful public purpose and which would 
not otherwise be performed by regular employees. 

(2) Such agreements shall provide — 

(A) for the payment by the Secretary to each employer, with 
respect to public service employment performed by any individual 
for such employer, of an amount not exceeding 100 percent of the 
cost of providing such employment to such individual during the 
first year of such employment, an amount not exceeding 75 per- 
cent of the cost of providing such employment to such individual 
during the second year of such employment, and an amount not 
exceeding 50 percent of the cost of providing such employment to 
such individual during the third year of such employment ; 

(B) the hourly wage rate and the number of hours per week 
individuals will be scheduled to work in public service employ- 
ment for such employer ; 

(C) that the Secretary will have such access to the premises of 
the employer as he finds necessary to determine whether such em- 
ployer is carrying out his obligations under the agreement and 
this part ; and 

(D) that the Secretary may terminate any agreement under 
this subsection at any time. 

(3) [Repealed.] 

(4) No wage rates provided under any agreement entered into 
under this subsection shall be lower than the applicable minimum wage 
for the particular work concerned. 

(f) Before entering into a project under section 432(b)(3), the 
Secretary shall have reasonable assurances that— 



241 



Sec. 435(b) 



(1) appropriate standards for the health, safety, and other 
conditions applicable to the performance of work and training on 
such project are established and will be maintained, 

(2) such project will not result in the displacement of em- 
ployed workers, 

(3) with respect to such project the conditions of work, train- 
ing, education, and employment are reasonable in the light of such 
factors as the type of work, geographical region, and proficiency 
of the participant, 

(4) appropriate workmen's compensation protection is provided 
to all participants. 

(g) Where an individual certified to the Secretary of Labor pur- 
suant to section 402(a) (19) (G) refuses without good cause to accept 
employment or participate in a project under a program established 
by this part, the Secretary of Labor shall (after providing opportunity 
for fair hearing) notify the State agency which certified such indi- 
vidual and submit such other information as he may have with respect 
to such refusal. 

(h) With respect to individuals who are participants in public 
service employment under the program established by section 432(b) 
(3), the Secretary shall periodically (but at least once every six 
months) review the employment record of each such individual while 
on such special work project and on the basis of such record and such 
other information as he may acquire determine whether it would be 
feasible to place such individual in regular employment or on any of 
the projects under the programs established by section 432(b) (1) 
and (2). 

Incentive Payment 

Sec. 434. (a) The Secretary is authorized to pay to any par- 
ticipant under a program established by section 432(b) (2) an incen- 
tive payment of not more than $30 per month, payable in such 
amounts and at such times as the Secretary prescribes. 

(b) The Secretary of Labor is also authorized to pay, to any mem- 
ber of a family participating in manpower training under this part, 
allowances for transportation and other costs incurred by such mem- 
ber, to the extent such costs are necessary to and directly related to the 
participation by such member in such training. 

Federal Assistance 

Sec. 435. (a) Federal assistance under this part shall not exceed 
90 per centum of the costs of carrying out this part. Non-Federal con- 
tributions may be cash or in kind, fairly evaluated, including but not 
limited to plant, equipment, and services. 

(b) Costs of carrying out this part include costs of training, super- 
vision, materials, administration, incentive payments, transportation, 



Sec. 435(b) 



242 



and other items as are authorized by the Secretary, but may not in- 
clude any reimbursement for time spent by participants in work, 
training, or other participation in the program. 

Period of Enrollment 

Sec. 436. (a) The program established by section 432(b)(2) 
shall be designed by the Secretary so that the average period of enroll- 
ment under all projects under such program throughout any area of 
the United States will not exceed one year. 

(b) Services provided under this part may continue to be provided 
to an individual for such period as the Secretary determines (in ac- 
cordance with regulations prescribed jointly by him and the Secre- 
tary of Health, Education, and Welfare) is necessary to qualify him 
fully for employment even though his earnings disqualify him from 
aid under a State plan approved under section 402. 

Relocation of Participants 

Sec. 437. The Secretary may assist participants to relocate their 
place of residence when he determines such relocation is necessary in 
order to enable them to become permanently employable and self-sup- 
porting. Such assistance shall be given only to participants who con- 
cur in their relocation and who will be employed at their place of 
relocation at wage rates which will meet at least their full need as 
determined by the State to which they will be relocated. Assistance 
under this section shall not exceed the reasonable costs of transporta- 
tion for participants, their dependents, and their household belong- 
ings plus such relocation allowance as the Secretary determines to be 
reasonable. 

Participants Not Federal Employees 

Sec. 438. Participants in programs established by this part shall 
be deemed not to be Federal employees and shall not be subject to the 
provisions of laws relating to Federal employment including those re- 
lating to hours of work, rates of compensation, leave, unemployment 
compensation, and Federal employee benefits. 

Rules and Regulations 

Sec. 439. The Secretary and the Secretary of Health, Education, 
and Welfare, shall, not later than July 1, 1972, issue regulations 
to carry out the purposes of this part. Such regulations shall provide 
for the establishment, jointly by the Secretary and the Secretary of 
Health, Education, and Welfare, of (1) a national coordination com- 
mittee the duty of which shall be to establish uniform reporting and 
similar requirements for the administration of this part, and (2) a 
regional coordination committee for each region which shall be re- 



243 



Sec. 443 



sponsible for review and approval of statewide operational plans de- 
veloped pursuant to section 433 (b) . 

Annual Report 

Sec. 440. The Secretary shall annually report to the Congress 
(with the first such report being made on or before July 1, 1970) on 
the work incentive programs established by this part. 

Evaluation and Research 

Sec. 441. (a) The Secretary shall (jointly with the Secretary 
of Health, Education, and Welfare) provide for the continuing evalua- 
tion of the work incentive programs established by this part, including 
their effectiveness in achieving stated goals and their impact on other 
related programs. He also may conduct research regarding ways to 
increase the effectiveness of such programs. He may, for this purpose, 
contract for independent evaluations of and research regarding such 
programs or individual projects under such programs. For purposes of 
sections 435 and 443, the cost of carrying out this section shall not be 
regarded as costs of carrying out work incentive programs established 
by this part. Nothing in this section shall be construed as authorizing 
the Secretary to enter into any contract with any organization after 
June 1, 1970, for the dissemination by such organization of informa- 
tion about programs authorized to be carried on under this part. 

Technical Assistance for Providers of Employment or Training 

Sec. 442. The Secretary is authorized to provide technical assist- 
ance to providers of employment or training to enable them to partici- 
pate in the establishment and operation of programs authorized to be 
established by section 432 (b) . 

Collection of State Share 

Sec. 443. If a non-Federal contribution of 10 per centum of the 
costs of the work incentive programs established by this part is not 
made in any State (as specified in section 402(a)), the Secretary of 
Health, Education, and Welfare may withhold any action under sec- 
tion 404 because of the State's failure to comply substantially with a 
provision required by section 402. If the Secretary of Health, Educa- 
tion, and Welfare does withhold such action, he shall, after reasonable 
notice and opportunity for hearing to the appropriate State agency or 
agencies, withhold any payments to be made to the State under sec- 
tions 3(a), 403(a), 1003(a), 1403(a), 1603(a), and 1903(a) until the 
amount so withheld (including any amounts contributed by the State 
pursuant to the requirement in section 402(a) (19) (C) ) equals 10 per 
centum of the costs of such work incentive programs. Such withhold- 



Sec. 444(a) 



244 



ing shall remain in effect until such time as the Secretary has assur- 
ances from the State that such 10 per centum will be contributed as re- 
quired by section 402. Amounts so withheld shall be deemed to have 
been paid to the State under such sections and shall be paid by the 
Secretary of Health, Education, and Welfare to the Secretary. Such 
payment shall be considered a non-Federal contribution for purposes 
of section 435. 

Agreements With Other Agencies Providing Assistance to 
Families of Unemployed Parents 

Sec. 444. (a) The Secretary is authorized to enter into an agree- 
ment (in accordance with the succeeding provisions of this section) 
with any qualified State agency (as described in subsection (b) ) under 
which the program established by the preceding sections of this part 
C will (except as otherwise provided in this section) be applicable to 
individuals certified by such State agency in the same manner, to the 
same extent, and under the same conditions as such program is appli- 
cable with respect to individuals certified to the Secretary by a State 
agency administering or supervising the administration of a State plan 
approved by the Secretary of Health, Education, and Welfare under 
part A of this title. 

(b) A qualified State agency referred to in subsection (a) is a 
State agency which is charged with the administration of a program — 

(1) the purpose of which is to provide aid or assistance to the 
families of unemployed parents, 

(2) which is not established pursuant to part A of title IV of 
the Social Security Act, 

(3) which is financed entirely from funds appropriated by the 
Congress, and 

(4) none of the financing of which is made available under 
any program established pursuant to title V of the Economic 
Opportunity Act. 

(c) (1) Any agreement under this section with a qualified State 
agency shall provide that such agency, will, with respect to all individ- 
uals receiving aid or assistance under the program of aid or assistance 
to families of unemployed parents administered by such agency, com- 
ply with the requirements imposed by section 402(a) (19) in the 
same manner and to the same extent as if (a) such qualified agency 
were the agency in such State administering or supervising the ad- 
ministration of a State plan approved under part A of this title, and 
(B) individuals receiving aid or assistance under the program ad- 
ministered by such qualified agency were recipients of aid under a 
State plan which is so approved. 

(2) Any agreement entered into under this section shall remain in 
effect for such period as may be specified in the agreement by the Sec- 



245 



Sec. 452(a) 



retary and the qualified State agency, except that, whenever the Secre- 
tary determines, after reasonable notice and opportunity for hearing 
to the qualified State agency, that such agency has failed substantially 
to comply with its obligations under such agreement, the Secretary 
may suspend operation of the agreement until such time as he is 
satisfied that the State agency will no longer fail substantially to 
comply with its obligations under such agreement. 

(3) Any such agreement shall further provide that the agreement 
will be inoperative for any calendar quarter if, for the preceding 
calendar quarter, the maximum amount of benefits payable under the 
program of aid or assistance to families of unemployed parents ad- 
ministered by the qualified State agency which is a party to such 
agreement is lower than the maximum amount of benefits payable 
under such program for the quarter which ended September 30, 1967. 

(d) The Secretary shall, at the request of any qualified State 
agency referred to in subsection (a) of this section and upon receipt 
from it of a list of the names of individuals rereferred to the Secre- 
tary, furnish to such agency the names of each individual on such list 
participating in public service employment under section 433(a) (3) 
whom the Secretary determines should continue to participate in such 
employment. The Secretary shall not comply with any such request 
with respect to an individual on such list unless such individual has 
been certified to the Secretary by such agency under section 402(a) 
(19) (G) for a period of at least six months. 

Part D — Child Support and Establishment of Paternity 12 

Appropriation 

Sec. 451. For the purpose of enforcing the support obligations 
owed by absent parents to their children, locating absent parents, 
establishing paternity, and obtaining child support, there is hereby 
authorized to be appropriated for each fiscal year a sum sufficient to 
carry out the purposes of this part. 

Duties of the Secretary 

Sec. 452. (a) The Secretary shall establish, within the Department 
of Health, Education, and Welfare a separate organizational unit, 
under the direction of a designee of the Secretary, who shall report 
directly to the Secretary and who shall — 

(1) establish such standards for State programs for locating 
absent parents, establishing paternity, and obtaining child sup- 
port as he determines to be necessary to assure that such programs 
\ will be effective ; 

1 Part D was established by part B of Public Law 93-647 with an effective date of July 1. 
1975 except for section 459 which was effective as of January 1, 1975. 

9 The effective date of July 1, 1975 was changed to August 1, 1975 by Public Law 94-16. 



Sec. 452(a) 



246 



(2) establish minimum organizational and staffing requirements 
for State units engaged in carrying out such programs under 
plans approved under this part ; 

(3) review and approve State plans for such programs; 

(4) evaluate the implementation of State programs established 
pursuant to such plan, conduct such audits of State programs 
established under the plan approved under this part as may be 
necessary to assure their conformity with the requirements of this 
part, and, not less often than annually, conduct a complete audit 
of the programs established under such plan in each State and 
determine for the purposes of the penalty provision of section 
403(h) whether the actual operation of such programs in each 
State conforms to the requirements of this part ; 

(5) assist States in establishing adequate reporting procedures 
and maintain records of the operations of programs established 
pursuant to this part in each State ; 

(6) maintain records of all amounts collected and disbursed 
under programs established pursuant to the provisions of this part 
and of costs incurred in collecting such amounts : 

(7) provide technical assistance to the States to help them es- 
tablish effective systems for collecting child support and estab- 
lishing paternity ; 

(8) receive applications from States for permission to utilize 
the courts of the United States to enforce court orders for support 
against absent parents and, upon a finding that (A) another State 
has not undertaken to enforce the court order of the originating 
State against the absent parent within a reasonable time, and (B) 
that utilization of the Federal courts is the only reasonable method 
of enforcing such order, approve such applications; 

(9) operate the Parent Locator Service established by section 
453 ; and 

(10) not later than June 30 of each year beginning after De- 
cember 31, 1975, submit to the Congress a report on all activities 
undertaken pursuant to the provisions of this part. 

(b) The Secretary shall, upon the request of any State having in 
effect a State plan approved under this part, certify the amount of any 
child support obligation assigned to such State to the Secretary of the 
Treasury for collection pursuant to the provisions of section 6305 of the 
Internal Revenue Code of 1954. No amount may be certified for collec- 
tion under this subsection except the amount of the delinquency under 
a court order for support and upon a showing by the State that such 
State has made diligent and reasonable efforts to collect such amounts 
utilizing its own collection mechanisms, and upon an agreement that 
the State will reimburse the United States for any costs involved in 
making the collection. The Secretary after consultation with the Sec- 



247 



Sec. 453(b) 



retary of the Treasury may, by regulation, establish criteria for ac- 
cepting amounts for collection and for making certification under this 
subsection including imposing such limitations on the frequency of 
making such certifications under this subsection. 

(c) (1) There is hereby established in the Treasury a revolving fund 
which shall be available to the Secretary without fiscal year limitation, 
to enable him to pay to the States for distribution in accordance with 
the provisions of section 457 such amounts as may be collected and paid 
(subject to paragraph (2) ) into such fund under section 6305 of the 
Internal Revenue Code of 1954. 

(2) There is hereby appropriated to the fund, out of any moneys 
in the Treasury not otherwise appropriated, amounts equal to the 
amounts collected under section 6305 of the Internal Revenue Code 
of 1954, reduced by the amounts credited or refunded as overpay- 
ments of the amounts so collected. The amounts appropriated by the 
preceding section shall be transferrred at least quarterly from the gen- 
eral fund of the Treasury to the fund on the basis of estimates made 
by the Secretary of the Treasury. Proper adjustments shall be made 
in the amounts subsequently transferred to the extent prior estimates 
were in excess of or less than the amounts required to be transferred. 

Parent Locator Service 

Sec. 453. (a) The Secretary shall establish and conduct a Parent 
Locator Service, under the direction of the designee of the Secretary 
referred to in section 452(a), w T hich shall be used to obtain and trans- 
mit to any authorized person (as defined in subsection (c) ) informa- 
tion as to the whereabouts of any absent parent when such information 
is to be used to locate such parent for the purpose of enforcing support 
obligations against such parent. 

(b) Upon request, filed in accordance with subsection (d) of any 
authorized person (as defined in subsection (c)) for the most recent 
address and place of employment of any absent parent, the Secretary 
shall, notwithstanding any other provision of law, provide through the 
Parent Locator Service such information to such person, if such 
information — 

(1) is contained in any files or records maintained by the Sec- 
retary or by the Department of Health, Education, and Welfare ; 
or 

(2) is not contained in such files or records, but can be obtained 
by the Secretary, under the authority conferred by subsection (e), 
from any other department, agency, or instrumentality, or the 
United States or of any State. 

\j No information shall be disclosed to any person if the disclosure of 
such information would contravene the national policy or security 
interests of the United States or the confidentiality of census data. The 



Sec. 453(c) 



248 



Secretary shall give priority to requests made by any authorized per- 
son described in subsection (c) (1). 

(c) As used in subsection (a) , the term "authorized person" means — 

(1) any agent or attorney of any State having in effect a plan 
approved under this part, who has the duty or authority under 
such plans to seek to recover any amounts owed as child support 
(including, when authorized under the State plan, any official of 
a political subdivision) ; 

(2) the court which has authority to issue an order against an 
absent parent for the support and maintenance of a child, or any 
agent of such court ; and 

(3) the resident parent, legal guardian, attorney, or agent of 
a child (other than a child receiving aid under part A of this title) 
(as determined by regulations prescribed by the Secretary) with- 
out regard to the existence of a court order against an absent par- 
ent who has a duty to support and maintain any such child. 

(d) A request for information under this section shall be filed in 
such manner and form as the Secretary shall by regulation prescribe 
and shall be accompanied or supported by such documents as the 
Secretary may determine to be necessary. 

(e) (1) Whenever the Secretary receives a request submitted under 
subsection (b) which he is reasonably satisfied meets the criteria estab- 
lished by subsections (a), (b), and (c), he shall promptly undertake 
to provide the information requested from the files and records main- 
tained by any of the departments, agencies, or instrumentalities of the 
United States or of any State. 

(2) Notwithstanding any other provision of law, whenever the 
individual who is the head of any department, agency, or instrumen- 
tality of the United States receives a request from the Secretary for 
information authorized to be provided by the Secretary under this 
section, such individual shall promptly cause a search to be made of 
the files and records maintained by such department, agency, or instru- 
mentality with a view to determining whether the information 
requested is contained in any such files or records. If such search 
discloses the information requested, such individuals shall immediately 
transmit such information to the Secretary, except that if any infor- 
mation is obtained the disclosure of which would contravene national 
policy or security interests of the United States or the confidentiality 
of census data, such information shall not be transmitted and such 
individual shall immediately notify the Secretary. If such search fails 
to disclose the information requested, such individual shall immedi- 
ately so notify the Secretary. The costs incurred by any such depart- 
ment, agency, or instrumentality of the United States or of any State 
in providing such information to the Secretary shall be reimbursed by 
him. Whenever such services are furnished to an individual specified 



249 



Sec. 454 



in subsection (c) (3), a fee shall be charged such individual. The fee 
so charged shall be used to reimburse the Secretary or his delegate for 
the expense of providing such services. 

(f ) The Secretary, in carrying out his duties and functions under 
this section, shall enter into arrangements with State agencies admin- 
istering State plans approved under this part for such State agencies 
to accept from resident parents, legal guardians, or agents of a child 
described in subsection (c) (3) and, after determining that the absent 
parent cannot be located through the procedures under the control of 
such State agencies, to transmit to the Secretary requests for informa- 
tion with regard to the whereabouts of absent parents and otherwise to 
cooperate with the Secretary in carrying out the purposes of this 
section. 

State Plan for Child Support 

Sec. 454. A State plan for child support must — 

(1) provide that it shall be in effect in all political subdivisions 
of the State ; 

(2) provide for financial participation by the State ; 

(3) provide for the establishment or designation of a single 
and separate organizational unit, which meets such staffing and 
organizational requirements as the Secretary may by regulation 
prescribe, within the State to administer the plan ; 

(4) provide that such State will undertake — 

(A) in the case of a child born out of wedlock with respect 
to whom an assignment under section 402(a) (26) of this title 
is effective, to establish the paternity of such child unless the 
agency administering the plan of the State under part A of 
this title determines in accordance with the standards pre- 
scribed by the Secretary pursuant to section 402(a) (26) (B) 
that it is against the best interests of the child to do so, and 

(B) in the case of any child with respect to whom such 
assignment is effective, to secure support for such child 
from his parent (or from any other person legally liable for 
such support) , utilizing any reciprocal arrangements adopted 
with other States (unless the agency administering the plan 
of the State under part A of this title determines in accord- 
ance with the standards prescribed by the Secretary pursuant 
to section 402(a) (26) (B) that it is against the best interests 
of the child to do so), except that when such arrangements 
and other means have proven ineffective, the State may utilize 
the Federal courts to obtain or enforce court orders for 
support ; 1 

1 Section 454(4) was amended bv Public Law 94-88. See also section 203(b) of Public 
Law 94-88 (p. 737 of this document). 



64-310 O - 76 - 17 



Sec. 454 



250 



(5) provide that, in any case in which child support payments 
are collected for a child with respect to whom an assignment under 
section 402 (a) (26) is effective, such payments shall be made to the 
State for distribution pursuant to section 457 and shall not be paid 
directly to the family except that this paragraph shall not apply 
to such payments (except as provided in section 457 (c) ) for any 
month in which the amount collected is sufficient to make such 
family ineligible for assistance under the State plan approved 
under part A ; 1 

(6) provide that (A) the child support collection or paternity 
determination services established under the plan shall be made 
available to any individual not otherwise eligible for such services 
upon application filed by such individual with the State, (B) an 
application fee for furnishing such services may be imposed, ex- 
cept that the amount of any such application fee shall be reason- 
able, as determined under regulations of the Secretary, and (C) 
any costs in excess of the fee so imposed may be collected from such 
individual by deducting such costs from the amount of any re- 
covery made; 

(7) provide for entering into cooperative arrangements with 
appropriate courts and law enforcement officials (A) to assist the 
agency administering the plan, including the entering into of fi- 
nancial arrangements with such courts and officials in order to 
assure optimum results under such program, and (B) with respect 
to any other matters of common concern to such courts or officials 
and the agency administering the plan ; 

(8) provide that the agency administering the plan will estab- 
lish a service to locate absent parents utilizing — 

(A) all sources of information and available records, and 

(B) the Parent Locator Service in the Department of 
Health, Education, and Welfare ; 

(9) provide that the State will, in accordance with standards 
prescribed by the Secretary, cooperate with any other State — 

(A) in establishing paternity, if necessary, 

(B) in locating an absent parent residing in the State 
(whether or not permanently) against whom any action is 
being taken under a program established under a plan ap- 
proved under this part in another State, 

(C) in securing compliance by an absent parent residing 
in such State (whether or not permanently) with an order 
issued by a court of competent jurisdiction against such 
parent for the support and maintenance of a child or chil- 
dren of such parent with respect to whom aid is being pro- 
vided under the plan of such other State, and 

1 See also sections 201(b) and 203(b) of Public Law 94-88 (pp. 736-737 of this docu- 
ment). 



251 



Sec. 455(b) 



(D) in carrying out other functions required under a plan 
approved under this part ; 

(10) provide that the State will maintain a full record of 
collections and disbursements made under the plan and have an 
adequate reporting system ; 

(11) provide that amounts collected as child support shall be 
distributed as provided in section 457 ; 

(12) provide that any payment required to be made under 
section 456 or 457 to a family shall be made to the resident parent, 
legal guardian, or caretaker relative having custody of or respon- 
sibility for the child or children ; and 

(13) provide that the State will comply with such other re- 
quirements and standards as the Secretary determines to be 
necessary to the establishment of an effective program for locat- 
ing absent parents, establishing paternity, obtaining support 
orders, and collecting support payments. 

Payments to States 

Sec. 455. (a) From the sums appropriated therefor, the Secretary 
shall pay to each State for each quarter, beginning with the quarter 
commencing July 1, 1975, an amount — 

(1) equal to 75 percent of the total amounts expended by such 
State during such quarter for the operation of the plan approved 
under section 454, and 

(2) equal to 50 percent of the total amounts expended by such 
State during such quarter for the operation of a plan which meets 
the conditions of section 454 except as is provided by a waiver 
by the Secretary which is granted pursuant to specific authority 
set forth in the law ; 

except that no amount shall be paid to any State on account of furnish- 
ing child support collection or paternity determination services (other 
than the parent locator services) to individuals under section 454(6) 
during any period beginning after June 30, 1976. 1 

(b) (1) Prior to the beginning of each quarter, the Secretary shall 
estimate the amount to which a State will be entitled under subsection 
(a) for such quarter, such estimates to be based on (A) a report filed 
by the State containing its estimate of the total sum to be expended 
in such quarter in accordance with the provisions of such subsection, 
and stating the amount appropriated or made available by the State 
and its political subdivisions for such expenditures in such quarter, 
and if such amount is less than the State's proportionate share of the 
total sum of such estimated expenditures, the source or sources from 
which the difference is expected to be derived, and (B) such other 
investigation as the Secretary may find necessary. 



1 Section 455(a) amended by Public Law 94-88. 



Sec. 456(a) 



252 



(2) The Secretary shall then pay, in such installments as he may 
determine, to the State the amount so estimated, reduced or increased 
to the extent of any overpayment or underpayment which the Secretary 
determines was made under this section to such State for any prior 
quarter and with respect to which adjustment has not already been 
made under this subsection. 

(3) Upon the making of any estimate by the Secretary under this 
subsection, any appropriations available for payments under this sec- 
tion shall be deemed obligated. 1 

Support Obligations 

Sec. 456. (a) The support rights assigned to the State under section 
402(a) (26) shall constitute an obligation owed to such State by the 
individual responsible for providing such support. Such obligation 
shall be deemed for collection purposes to be collectible under all 
applicable State and local processes. 

(1) The amount of such obligation shall be — 

(A) the amount specified in a court order which covers 
the assigned support rights, or 

(B) if there is no court order, an amount determined by 
the State in accordance with a formula approved by the 
Secretary, and 

(2) Any amounts collected from an absent parent under the 
plan shall reduce, dollar for dollar, the amount of his obligation 
under paragraphs (1) (A) and (B). 

(b) A debt which is a child support obligation assigned to a State 
under section 402(a) (26) is not released by a discharge in bankruptcy 
under the Bankruptcy Act. 

Distribution of Proceeds 

Sec. 457. 2 (a) The amounts collected as child support by a State 
pursuant to a plan approved under this part during the 15 months 
beginning July 1, 1975, shall be distributed as follows : 

(1) 40 per centum of the first $50 of such amounts as are col- 
lected periodically which represent monthly support payments 
shall be paid to the family without any decrease in the amount 
paid as assistance to such family during such month ; 

(2) such amounts as are collected periodically which are in 
excess of any amount paid to the family under paragraph (1) 
which represent monthly support payments shall be retained by 
the State to reimburse it for assistance payments to the family 
during such period (with appropriate reimbursement of the 
Federal Government to the extent of its participation in the 
financing) ; 

1 Section 455(b) added by Public Law 94-88. See also section 206 of Public Law 

94-88 (p. 737 of this document). 

2 See section 402(a) (28) (p. 214) 



253 



Sec. 458(b) 



(3) such amounts as are in excess of amounts retained by the 
State under paragraph (2) and are not in excess of the amount 
required to be paid during such period to the family by a court 
order shall be paid to the family ; and 

(4) such amounts as are in excess of amounts required to be 
distributed under paragraphs (1), (2), and (3) shall be (A) 
retained by the State (with appropriate reimbursement of the 
Federal Government to the extent of its participation in the 
financing) as reimbursement for any past assistance payments 
made to the family for which the State has not been reimbursed or 
(B) if no assistance payments have been made by the State which 
have not been repaid, such amounts shall be paid to the family. 

(b) The amounts collected as child support by a State pursuant to 
a plan approved under this part during any fiscal year beginning after 
September 30, 1976, shall be distributed as follows : 

(1) such amounts as are collected periodically which represent 
monthly support payments shall be retained by the State to reim- 
burse it for assistance payments to the family during such period 
(with appropriate reimbursement of the Federal Government to 
the extent of its participation in the financing) ; 

(2) such amounts as are in excess of amounts retained by the 
State under paragraph (1) and are not in excess of the amount 
required to be paid during such period to the family by a court 
order shall be paid to the family ; and 

(3) such amounts as are in excess of amounts required to be 
distributed under paragraphs (1) and (2) shall be (A) retained 
by the State (with appropriate reimbursement of the Federal 
Government to the extent of its participation in the financing) as 
reimbursement for any past assistance payments made to the 
family for which the State has not been reimbursed or (B) if no 
assistance payments have been made by the State which have not 
been repaid, such amounts shall be paid to the family. 

(c) Whenever a family for whom child support payments have been 
collected and distributed under the plan ceases to receive assistance 
under part A of this title, the State may — 

(1) continue to collect such support payments from the absent 
parent for a period of not to exceed three months from the month 
following the month in which such family ceased to receive assist- 
ance under part A of this title, and pay all amounts so collected 
to the family ; and 

(2) at the end of such three-month period, if the State is au- 
thorized to do so by the individual on whose behalf the collection 
will be made, continue to collect such support payments from the 
absent parent and pay the net amount of any amount so collected 
to the family after deducting any costs incurred in making the 
collection from the amount of any recovery made. 



Sec. 458(a) 



254 



Incentive Payment to Localities 

Sec. 458. 1 (a) When a political subdivision of a State makes, for 
the State of which it is a political subdivision, or one State makes, for 
another State, the enforcement and collection of the support rights 
assigned under section 402(a) (26) (either within or outside of such 
State) , there shall be paid to such political subdivision or such other 
State from amounts which would otherwise represent the Federal 
share of assistance to the family of the absent parent — 

(1) an amount equal to 25 per centum of any amount collected 
(and required to be distributed as provided in section 457 to reduce 
or repay assistance payments) which is attributable to the sup- 
port obligation owed for 12 months ; and 

(2) an amount equal to 10 per centum of any amount collected 
(and required to be distributed as provided in section 457 to reduce 
or repay assistance payments) which is attributable to the support 
obligation owed for any month after the first twelve months for 
which such collections are made. 

(b) Where more than one jurisdiction is involved in such enforce- 
ment or collection, the amount of the incentive payment determined 
under paragraphs (1) and (2) of subsection (a) shall be allocated 
among the jurisdictions in a manner to be prescribed by the Secretary. 

Consent by the United States to Garnishment and Similar 
Proceedings for Enforcement of Child Support and Alimony 
Obligations 

Sec. 459. Notwithstanding any other provision of law, effective 
January 1, 1975, moneys (the entitlement to which is based upon re- 
muneration for employment) due from, or payable by, the United 
States (including any agency or instrumentality thereof and any 
wholly owned Federal corporation) to any individual, including mem- 
bers of the armed services, shall be subject, in like manner and to the 
same extent as if the United States were a private person, to legal proc- 
ess brought for the enforcement, against such individual of his legal 
obligations to provide child support or make alimony payments. 

Civil Actions To Enforce Child Support Obligations 

Sec. 460. The district courts of the United States shall have juris- 
diction, without regard to any amount in controversy, to hear and de- 
termine any civil action certified by the Secretary of Health, Educa- 
tion, and Welfare under section 452(a) (8) of this Act. A civil action 
under this section may be brought in any judicial district in which the 
claim arose, the plaintiff resides, or the defendant resides. 



1 See sections 201(b) and 203(b) of Public Law 94-88 (pp. 736-737 of this document). 



TITLE V— MATERNAL AND CHILD HEALTH AND 
CRIPPLED CHILDREN'S SERVICES 

Page 1 



Sec. 501. Authorization of Appropriations 255 

Sec. 502. Purposes for Which Funds Are Available 255 

Sec. 503. Allotments to States for Maternal and Child Health Services 256 

Sec. 504. Allotments to States for Crippled Children's Services 257 

Sec. 505. Approval of State Plans 257 

Sec. 506. Payments 260 

Sec. 507. Operation of State Plans 262 

Sec. 508. Special Project Grants for Maternity and Infant Care 262 

Sec. 509. Special Project Grants for Health of School and Preschool 

Children 263 

Sec. 510. Special Project Grants for Dental Health of Children 264 

Sec. 511. Training of Personnel 265 

Sec. 512. Research Projects Relating to Maternal and Child Health Serv- 
ices and Crippled Children's Services 265 

Sec. 513. Administration 265 

Sec. 514. Definition 266 

Sec. 515. Observance of Religious Beliefs 266 

Sec. 516. Supplemental Allotments 266 



Authorization of Appropriations 

Sec. 501. For the purpose of enabling each State to extend and 
improve (especially in rural areas and in areas suffering from severe 
economic distress), as far as practicable under the conditions in such 
State, 

(1) services for reducing infant mortality and otherwise pro- 
moting the health of mothers and children ; and 

(2) services for locating, and for medical, surgical, corrective, 
and other services and care for and facilities for diagnosis, hos- 
pitalization, and aftercare for, children who are crippled or who 
are suffering from conditions leading to crippling, 

there are authorized to be appropriated $250,000,000 for the fiscal 
year ending June 30, 1969, $275,000,000 for the fiscal year ending 
June 30, 1970, $300,000,000 for the fiscal year ending June 30, 1971, 
$325,000,000 for the fiscal year ending June 30, 1972, and $350,000,000 
for the fiscal year ending June 30, 1973, and each fiscal year thereafter. 

Purposes for Which Funds Are Available 

Sec. 502. Appropriations pursuant to section 501 shall be available 
for the following purposes in the following proportions : 

(1) In the case of the fiscal year ending June 30, 1969, and each 
of the next 5 fiscal years, (A) 50 percent of the appropriation 



1 This table of contents does not appear In the law. 

(255) 



Sec. 503 



256 



for such year shall be for allotments pursuant to sections 503 and 
504; (B) 40 percent thereof shall be for grants pursuant to sec- 
tions 508, 509, and 510; and (C) 10 percent thereof shall be for 
grants, contracts, or other arrangements pursuant to sections 511 
and 512. 

(2) In the case of the fiscal year ending June 30, 1975, and 
each fiscal year thereafter, (A) 90 percent of the appropria- 
tion for such years shall be for allotments pursuant to sections 
503 and 504; and (B) 10 percent thereof shall be for grants, con- 
tracts, or other arrangements pursuant to sections 511 and 512. 
Not to exceed 5 percent of the appropriation for any fiscal year under 
this section shall be transferred, at the request of the Secretary, from 
one of the purposes specified in paragraph (1) or (2) to another 
purpose or purposes so specified. For each fiscal year, the Secretary 
shall determine the portion of the appropriation, within the percent- 
age determined above to be available for sections 503 and 504, which 
shall be available for allotment pursuant to section 503 and the por- 
tion thereof which shall be available for allotment pursuant to sec- 
tion 504. Notwithstanding the preceding provisions of this section, 
of the amount appropriated for any fiscal year pursuant to section 501, 
not less than 6 percent of the amount appropriated shall be available 
for family planning services from allotments under section 503 and 
for family planning services under projects under sections 508 and 512. 

Allotments to States for Maternal and Child Health Services 

Sec. 503. The amount determined to be available pursuant to sec- 
tion 502 for allotments under this section shall be allotted for pay- 
ments for maternal and child health services as follows : 

(1) One-half of such amount shall be allotted by allotting to 
each State $70,000 plus such part of the remainder of such one- 
half as he finds that the number of live births in such State bore to 
the total number of live births in the United States in the latest 
calendar year for which he has statistics. 

(2) The remaining one-half of such amount shall (in addition 
to the allotments under paragraph (1) ) be allotted to the States 
from time to time according to the financial need of each State 
for assistance in carrying out its State plan, as determined by the 
Secretary after taking into consideration the number of live 
births in such State ; except that not more than 25 percent of such 
one-half shall be available for grants to State agencies (admin- 
istering or supervising the administration of a State plan ap- 
proved under section 505), and to public or other nonprofit insti- 
tutions of higher learning (situated in any State), for special 



257 



Sec. 505(a) 



projects of regional or national significance which may contribute 
to the advancement of maternal and child health. 

Allotments to States for Crippled Children's Services 

Sec. 504. The amount determined to be available pursuant to sec- 
tion 502 for allotments under this section shall be allotted for pay- 
ments for crippled children's services as follows: 

(1) One-half of such amount shall be allotted by allotting to 
each State $70,000 and allotting the remainder of such one-half 
according to the need of each State as determined by him after 
taking into consideration the number of crippled children in 
such State in need of the services referred to in paragraph (2) 
of section 501 and the cost of furnishing such services to them. 

(2) The remaining one-half of such amount shall (in addition 
to the allotments under paragraph (1) ) be allotted to the States 
from time to time according to the financial need of each State 
for assistance in carrying out its State plan, as determined by the 
Secretary after taking into consideration the number of crippled 
children in each State in need of the services referred to in para- 
graph (2) of section 501 and the cost of furnishing such serv- 
ices to them; except that not more than 25 percent of such one- 
half shall be available for grants to State agencies (administering 
or supervising the administration of a State plan approved under 
section 505) , and to public or other nonprofit institutions of higher 
learning (situated in any State), for special projects of regional 
or national significance which may contribute to the advancement 
of services for crippled children. 

Approval of State Plans 

Sec. 505. (a) In order to be entitled to payments from allotments 
under section 502, a State must have a State plan for maternal and 
child health services and services for crippled children which — 

(1) provides for financial participation by the State; 

(2) provides for the administration of the plan by the State 
health agency or the supervision of the administration of the 
plan by the State health agency ; except that in the case of those 
States which on July 1, 1967, provided for administration (or 
supervision thereof) of the State plan approved under section 
513 (as in effect on such date) by a State agency other than the 
State health agency, the plan of such State may be approved 
under this section if it would meet the requirements of this sub- 
section except for provision of administration (or supervision 
thereof) by such other agency for the portion of the plan relat- 



Sec. 505(a) 



258 



ing to services for crippled children, and, in each such case, the 
portion of such plan which each such agency administers, or the 
administration of which each such agency supervises, shall be re- 
garded as a separate plan for purposes of this title ; 

(3) provides (A) such methods of administration (including 
methods relating to the establishment and maintenance of per- 
sonnel standards on a merit basis, except that the Secretary shall 
exercise no authority with respect to the selection, tenure of 
office, and compensation of any individual employed in accord- 
ance with such methods) as are necessary for the proper and effi- 
cient operation of the plan and (B) provides for the training 
and effective use of paid subprofessional staff, with particular 
emphasis on the full-time or part-time employment of persons 
of low income, as community service aides, in the administration 
of the plan and for the use of nonpaid or partially paid volun- 
teers in providing services and in assisting any advisory com- 
mittees established by the State agency ; 

(4) provides that the State agency will make such reports, in 
such form and containing such information, as the Secretary may 
from time to time require, and comply with such provisions as he 
may from time to time find necessary to assure the correctness and 
verification of such reports ; 

(5) provides for cooperation with medical, health, nursing, ed- 
ucational, and welfare groups and organizations and, with respect 
to the portion of the plan relating to services for crippled chil- 
dren, with any agency in such State charged with administering 
State laws providing for vocational rehabilitation of physically 
handicapped children ; 

(6) provides for payment of the reasonable cost of inpatient 
hospital services provided under the plan, as determined in ac- 
cordance with methods and standards, consistent with section 
1122, which shall be developed by the State and included in the 
plan, except that the reasonable cost of any such services as de- 
termined under such methods and standards shall not exceed the 
amount which would be determined under section 1861 (v) as the 
reasonable cost of such services for purposes of title XVIII; 

(7) provides, with respect to the portion of the plan relating 
to services for crippled children, for early identification of chil- 
dren in need of health care and services, and for health care and 
treatment needed to correct or ameliorate defects or chronic con- 
ditions discovered thereby, through provision of such periodic 
screening and diagnostic services, and such treatment, care and 
other measures to correct or ameliorate defects or chronic condi- 
tions, as may be provided in regulations of the Secretary; 



259 



Sec. 505(a) 



(8) effective July 1, 1974, provides a program (carried out 
directly or through grants or contracts) of projects described 
in section 508 which offers reasonable assurance, particularly in 
areas with concentrations of low-income families, of satisfactorily 
helping to reduce the incidence of mental retardation and other 
handicapping conditions caused by complications associated with 
child bearing and of satisfactorily helping to reduce infant and 
maternal mortality ; 

(9) effective July 1, 1974, provides a program (carried out 
directly or through grants or contracts) of projects described 
in section 509 which offers reasonable assurance, particularly in 
areas with concentrations of low-income families, of satisfactorily 
promoting the health of children and youth of school or pre- 
school age; 

(10) effective July 1, 1974, provides a program (carried out 
directly or through grants or contracts) of projects described 
in section 510 which offers reasonable assurance, particularly in 
areas with concentrations of low-income families, of satisfactorily 
promoting the dental health of children and youth of school or 
preschool age; 

(11) provides for carrying out the purposes specified in sec- 
tion 501 ; 

(12) provides for the development of demonstration services 
(with special attention to dental care for children and family 
planning services for mothers) in needy areas and among groups 
in special need ; 

(13) provides that, where payment is authorized under the 
plan for services which an optometrist is licensed to perform, the 
individual for whom such payment is authorized may, to the ex- 
tent practicable, obtain such services from an optometrist licensed 
to perform such services except where such services are rendered 
in a clinic, or another appropriate institution, which does not have 
an arrangement with optometrists so licensed ; 

(14) provides that acceptance of family planning services pro- 
vided under the plan shall be voluntary on the part of the indi- 
vidual to whom such services are offered and shall not be a pre- 
requisite to eligibility for or the receipt of any service under the 
plan; and 

(15) provides — 

(A) that the State health agency, or other appropriate 
State medical agency, shall be responsible for establishing a 
plan, consistent with regulations prescribed by the Secretary, 
for the review by appropriate professional health personnel 
of the appropriateness and quality of care and services fur- 



Sec. 505(b) 



260 



nished to recipients of services under the plan and, where 
applicable, for providing guidance with respect thereto to the 
other State agency referred to in paragraph (2) ; and 

(B) that the State or local agency utilized by the Secre- 
tary for the purpose specified in the first sentence of section 
1864(a), or, if such agency is not the State agency which is 
responsible for licensing health institutions, the State agency 
responsible for such licensing, will perform the function of 
determining whether institutions and agencies meet the re- 
quirements for participation in the program under the plan 
under this title. 

(b) The Secretary shall approve any plan which meets the require- 
ments of subsection (a). 

Payments 

Sec. 506. (a) From the sums appropriated therefor and the allot- 
ments available under section 503 (1) or 504 (1) , as the case may be, the 
Secretary shall pay to each State which has a plan approved under 
this title, for each quarter, beginning with the quarter commencing 
July 1, 1968, an amount, which shall be used exclusively for carry- 
ing out the State plan, equal to one-half of the total sum expended 
during such quarter for carrying out such plan with respect to ma- 
ternal and child health services and services for crippled children, 
respectively. 

(b) (1) Prior to the beginning of each quarter, the Secretary shall 
estimate the amount to which a State will be entitled under subsection 
(a) for such quarter, such estimates to be based on (A) a report filed 
by the State containing its estimate of the total sum to be expended 
in such quarter in accordance with the provisions of such subsection, 
and stating the amount appropriated or made available by the State 
and its political subdivisions for such expenditures in such quarter, 
and if such amount is less than the State's proportionate share of the 
total sum of such estimated expenditures, the source or sources from 
which the difference is expected to be derived, and (B) such other in- 
vestigation as the Secretary may find necessary. 

(2) The Secretary shall then pay to the State, in such installments 
as he may determine, the amount so estimated, reduced or increased to 
the extent of any overpayment or underpayment which the Secretary 
determines was made under this section to such State for any prior 
quarter and with respect to which adjustment has not already been 
made under this subsection. 

(3) Upon the making of an estimate by the Secretary under this 
subsection, any appropriations available for payments under this sec- 
tion shall be deemed obligated. 



261 



Sec 506(f) 



(c) The Secretary shall also from time to time make payments to 
the States from their respective allotments pursuant to section 503(2) 
or 504(2). Payments of grants under sections 503(2), 504(2), 508, 
509, 510, and 511, and of grants, contracts, or other arrangements 
under section 512, may be made in advance or by way of reimburse- 
ment, and in such installments, as the Secretary may determine ; and 
shall be made on such conditions as the Secretary finds necessary to 
carry out the purposes of the section involved. 

(d) The total amount determined under subsections (a) and (b) 
and the first sentence of subsection (c) for any fiscal year ending after 
June 30, 1968, shall be reduced by the amount by which the sum ex- 
pended (as determined by the Secretary) from non-Federal sources 
for maternal and child health services and services for crippled chil- 
dren for such year is less than the sum expended from such sources 
for such services for the fiscal year ending June 30, 1968. In the case 
of any such reduction, the Secretary shall determine the portion 
thereof which shall be applied, and the manner of applying such re- 
duction, to the amounts otherwise payable from allotments under sec- 
tion 503 or section 504. 

(e) Notwithstanding the preceding provisions of this section, no 
payment shall be made to any State thereunder from the allotments 
under section 503 or section 504 for any period after June 30, 1968, 
unless the State makes a satisfactory showing that it is extending the 
provisions of services, including services for dental care for children 
and family planning for mothers, to which such State's plan applies 
in the State with a view to making such services available by July 1, 
1975, to children and mothers in all parts of the State. 

(f) Notwithstanding the preceding provisions of this section, no 
payment shall be made to any State thereunder — 

(1) with respect to any amount paid for items or services fur- 
nished under the plan after December 31, 1972, to the extent that 
such amount exceeds the charge which would be determined to 
be reasonable for such items or services under the fourth and fifth 
sentences of section 1842(b) (3) ; or 

(2) with respect to any amount paid for services furnished 
under the plan after December 31, 1972, by a provider or other 
person during any period of time, if payment may not be made 
under title XVIII with respect to services furnished by such pro- 
vider or person during such period of time solely by reason of a 
determination by the Secretary under section 1862(d) (1) or un- 
der clause (D), (E),or (F) of section 1866(b) (2) ; or 

(3) with respect to any amount expended for inpatient hos- 
pital services furnished under the plan to the extent that such 
amount exceeds the hospital's customary charges with respect to 



Sec. 506(g) 



262 



such services or (if such services are furnished under the plan 
by a public institution free of charge or at nominal charges to the 
public) exceeds an amount determined on the basis of those items 
(specified in regulations prescribed by the Secretary) included 
in the determination of such payment which the Secretary finds 
will provide fair compensation to such institution for such serv- 
ices; or 

(4) with respect to any amount expended for services furnished 
under the plan by a hospital unless such hospital has in effect a 
utilization review plan which meets the requirement imposed by 
section 1861 (k) for purposes of title XVIII ; and if such hospital 
has in effect such a utilization review plan for purposes of title 
XVIII, such plan shall serve as the plan required by this subsec- 
tion (with the same standards and procedures and the same review 
committee or group) as a condition of payment under this title; 
the Secretary is authorized to waive the requirements of this para- 
graph in any State if the State agency demonstrates to his sat- 
isfaction that it has in operation utilization review procedures 
which are superior in their effectiveness to the procedures required 
under section 1861 (k) . 
(g) For limitation on Federal participation for capital expenditures 

which are out of conformity with a comprehensive plan of a State or 

areawide planning agency, see section 1122. 

Operation of State Plans 

Sec. 507. If the Secretary, after reasonable notice and opportunity 
for hearing to the State agency administering or supervising the ad- 
ministration of the State plan approved under this title, finds — 

(1) that the plan has been so changed that it no longer com- 
plies with the provisions of section 505 ; or 

(2) that in the administration of the plan there is a failure 
to comply substantially with any such provision ; 

the Secretary shall notify such State agency that further payments 
will not be made to the State (or, in his discretion, that payments will 
be limited to categories under or parts of the State plan not affected 
by such failure), until the Secretary is satisfied that there will no 
longer be any such failure to comply. Until he is so satisfied he shall 
make no further payments to such State (or shall limit payments to 
categories under or parts of the State plan not affected by such 
failure). 

Special Project Grants for Maternity and Infant Care 

Sec. 508. (a) In order to help reduce the incidence of mental retarda- 
tion and other handicapping conditions caused by complications as- 



263 



Sec. 509(a) 



sociated with childbearing and to help reduce infant and maternal 
mortality, the Secretary is authorized to make, from the sums avail- 
able under clause (B) of paragraph (1) of section 502, grants to the 
State health agency of any State and, with the consent of such agency, 
to the health agency of any political subdivision of the State, and to 
any other public or nonprofit private agency, institution, or organiza- 
tion, to pay not to exceed 75 percent of the cost (exclusive of general 
agency overhead) of any project for the provision of — 

(1) necessary health care to prospective mothers (including, 
after childbirth, health care to mothers and their infants) who 
have or are likely to have conditions associated with childbearing 
or are in circumstances which increase the hazards to the health 
of the mothers or their infants (including those which may cause 
physical or mental defects in the infants) , or 

(2) necessary health care to infants during their first year of 
life who have any condition or are in circumstances which in- 
crease the hazards to their health, or 

(3) family planning services, 

but only if the State or local agency determines that the recipient will 
not otherwise receive such necessary health care or services because he 
is from a low-income family or for other reasons beyond his control. 
Acceptance of family planning services provided under a project 
under this section (and section 512) shall be voluntary on the part of 
the individual to whom such services are offered and shall not be a pre- 
requisite to the eligibility for or the receipt of any service under such 
project. 

(b) No grant may be made under this section for any project for 
any period after June 30, 1974. 

Special Project Grants for Health of School and Preschool 

Children 

Sec. 509. (a) In order to promote the health of children and youth 
of school or preschool age, particularly in areas with concentrations 
of low-income families, the Secretary is authorized to make, from the 
sums available under clause (B) of paragraph (1) of section 502, 
grants to the State health agency of any State and (with the consent 
of such agency) to the health agency of any political subdivision of 
the State, to the State agency of the State administering or supervis- 
ing the administration of the State plan approved under section 505, 
to any school of medicine (with appropriate participation by a school 
of dentistry) , and to any teaching hospital affiliated with such a school, 
to pay not to exceed 75 percent of the cost of projects of a comprehen- 
sive nature for health care and services for children and youth of 
school age or for preschool children (to help them prepare to start 



Sec. 509(b) 



264 



school). No project shall be eligible for a grant under this section 
unless it provides (1) for the coordination of health care and services 
provided under it with, and utilization (to the extent feasible) of, 
other State or local health, welfare, and education programs for such 
children, (2) for payment of (A) the reasonable cost (as determined 
in accordance with standards, consistent with section 1122, approved 
by the Secretary) of inpatient hospital services provided under the 
project, or (B) if less, the customary charges with respect to such 
services provided under the project, or (C) if such services are fur- 
nished under the project by a public institution free of charge or at 
nominal charges to the public, an amount determined on the basis of 
those items (specified in regulations prescribed by the Secretary) in- 
cluded in the determination of such reasonable cost which the Secre- 
tary finds will provide fair compensation to such institution for such 
services, and (3) that any treatment, correction of defects, or after- 
care provided under the project is available only to children who 
would not otherwise receive it because they are from low-income fam- 
ilies or for other reasons beyond their control; and no such project 
for children and youth of school age shall be considered to be of a 
comprehensive nature for purposes of this section unless it includes 
(subject to the limitation in the preceding provisions of this sentence) 
at least such screening, diagnosis, preventive services, treatment, cor- 
rection of defects, and aftercare, both medical and dental, as may be 
provided for in regulations of the Secretary. 

(b) No grant may be made under this section for any project for 
any period after June 30, 1974. 

Special Project Grants for Dental Health of Children 

Sec. 510. (a) In order to promote the dental health of children 
and youth of school or preschool age, particularly in areas with con- 
centrations of low-income families, the Secretary is authorized to make 
grants, from the sums available under clause (B) of paragraph (1) 
of section 502, to the State health agency of any State and (with the 
consent of such agency) to the health agency of any political subdi- 
vision of the State, and to any other public or nonprofit private agency, 
institution, or organization, to pay not to exceed 75 percent of the 
cost of projects of a comprehensive nature for dental care and services 
for children and youth of school age or for preschool children. No 
project shall be eligible for a grant under this section unless it pro- 
vides that any treatment, correction of defects, or aftercare provided 
under the project is available only to children who would not other- 
wise receive it because they are from low-income families or for other 
reasons beyond their control, and unless it includes (subject to the 
limitation of the foregoing provisions of this sentence) at least such 



265 



Sec. 513(a) 



preventive services, treatment, correction of defects, and aftercare, 
for such age groups, as may be provided in regulations of the Secre- 
tary. Such projects may also include research looking toward the de- 
velopment of new methods of diagnosis or treatment, or demonstration 
of the utilization of dental personnel with various levels of training. 

(b) No grant may be made under this section for any project for 
any period after June 30, 1974. 

Training of Personnel 

Sec. 511. From the sums available under clause (C) of paragraph 
(1) or clause (B) of paragraph (2) of section 502, the Secretary is 
authorized to make grants to public or nonprofit private institutions 
of higher learning for training personnel for health care and related 
services for mothers and children, particularly mentally retarded chil- 
dren and children with multiple handicaps. In making such grants the 
Secretary shall give special attention to programs providing training 
at the undergraduate level. 

Research Projects Relating to Maternal and Child Health 
Services and Crippled Children's Services 

Sec. 512. From the sums available under clause (C) of paragraph 
(1) or clause (B) of paragraph (2) of section 502, the Secretary is 
authorized to make grants to or jointly financed cooperative arrange- 
ments with public or other nonprofit institutions of higher learning, 
and public or nonprofit private agencies and organizations engaged in 
research or in maternal and child health or crippled children's pro- 
grams, and contracts with public or nonprofit private agencies and or- 
ganizations engaged in research or in such programs, for research 
projects relating to maternal and child health services or crippled 
children's services which show promise of substantial contribution to 
the advancement thereof. Effective with respect to grants made and 
arrangements entered into after June 30, 1968, (1) special emphasis 
shall be accorded to projects which will help in studying the need for, 
and the feasibility, costs, and effectiveness of, comprehensive health 
care programs in which maximum use is made of health personnel 
with varying levels of training, and in studying methods of training 
for such programs, and (2) grants under this section may also in- 
clude funds for the training of health personnel for work in such 
projects. 

Administration 

Sec. 513. (a) The Secretary of Health, Education, and Welfare 
shall make such studies and investigations as will promote the efficient 
administration of this title. 



64-310 O - 76 - 18 



Sec. 513(b) 



266 



(b) Such portion of the appropriations for grants under section 
501 as the Secretary may determine, but not exceeding one-half of 
1 percent thereof, shall be available for evaluation by the Secretary 
(directly or by grants or contracts) of the programs for which such 
appropriations are made and, in the case of allotments from any such 
appropriation, the amount available for allotments shall be reduced 
accordingly. 

(c) Any agency, institution, or organization shall, if and to the ex- 
tent prescribed by the Secretary, as a condition to receipt of grants 
under this title, cooperate with the State agency administering or 
supervising the administration of the State plan approved under 
title XIX in the provision of care and services, available under a plan 
or project under this title, for children eligible therefor under such 
plan approved under title XIX. 

Definition 

Sec. 514. For purposes of this title, a crippled child is an indi- 
vidual under the age of 21 who has an organic disease, defect, or 
condition which may hinder the achievement of normal growth and 
development. 

Observance of Religious Beliefs 

Sec. 515. Nothing in this title shall be construed to require any 
State which has any plan or program approved under, or receiving 
financial support under, this title to compel any person to undergo any 
medical screening, examination, diagnosis, or treatment or to accept 
any other health care or services provided under such plan or program 
for any purpose (other than for the purpose of discovering and pre- 
venting the spread of infection or contagious disease or for the purpose 
of protecting environmental health), if such person objects (or, in 
case such person is a child, his parent or guardian objects) thereto on 
religious grounds. 

Supplemental Allotments 

Sec. 516. (a) (1) For each fiscal year (commencing with the fiscal 
year ending June 30, 1975), there shall (subject to paragraph (2) ) be 
allotted to each State (from funds appropriated for such fiscal year 
pursuant to subsection (b) ) an amount, which shall be in addition to 
and available for the same purposes as the allotments of such State 
(as determined under sections 503 and 504), equal to the excess (if 
any) of — 

(A) the amount of the allotment of such State (as determined 
under sections 503 and 504) for the fiscal year ending June 30, 



267 



Sec. 516(b) 



1973, plus the amounts of any grants to such States under sec- 
tions 508, 509, and 510, over 

(B) the amount of the allotment of such State (as determined 
under sections 503 and 504) for such fiscal year which commences 
after June 30, 1973. 
(2) No State shall receive an allotment under this section for any 
fiscal year, unless such State (in the administration of its State plan, 
approved under section 505) has in effect arrangements which the 
Secretary finds will provide for the continuation of appropriate serv- 
ices to population groups previously receiving services from funds 
made available (for the fiscal year ending June 30, 1974) to such State 
pursuant to sections 508, 509, and 510. 

(b)(1)(A) There are (subject to subparagraph (B)) hereby au- 
thorized to be appropriated for each fiscal year (commencing with 
the fiscal year ending June 30, 1975) such amounts as may be necessary 
to enable the Secretary to make the allotments authorized under sub- 
section (a). 

(B) Nothing contained in subparagraph (A) shall be construed 
to authorize, for any fiscal year, the appropriation under this sub- 
section of any amount which is in excess of the amount by which — 

(i) the amount authorized to be appropriated under section 501 
for such year exceeds 

(ii) the total amounts appropriated pursuant to section 501 for 
such year. 

(2) If, for any fiscal years, the total amount appropriated pursu- 
ant to paragraph (1) is less than the total amount allotted to all States 
under subsection (a), then the amount of the allotment of each State 
(as determined under subsection (a)) shall be reduced to an amount 
which bears the same ratio to the total amount appropriated pursuant 
to paragraph (1) for such fiscal year as the amount of the allotment 
of such State (as determined under subsection (a) ) bears to the total 
amount allotted to all States under subsection (a) for such fiscal year. 

TITLE VI — GRANTS TO STATES FOR SERVICES TO THE 

AGED, BLIND, OR DISABLED 



[Title VI was repealed effective October 1, 1975 by Public Law 
93-647. See title XX for social services.] 



TITLE VII— ADMINISTRATION 



Page 1 



Sec. 701. Office of Commissioner of Social Security 269 

Sec. 702. Duties of the Secretery 269 

Sec. 703- Expenses of the Secretary — 269 

Sec. 704. Reports 270 

Sec. 705. Training Grants for Public Welfare Personnel 270 

Sec. 706. Advisory Council on Social Security 272 

Sec. 707. Grants for Expansion and Development of Undergraduate and 

Graduate Programs 273 



Office of Commissioner of Social Security 

Section 701. [Superseded by section 4 of Reorganization Plan No. 1 
of 1953. Section 701 provided for an Office of Commissioner for Social 
Security. Section 4 of the Plan provides : "There shall be in the De- 
partment a Commissioner of Social Security who shall be appointed 
by the President by and with the advice and consent of the Senate, 
shall perform such functions concerning social security and public 
welfare as the Secretary may prescribe, and shall receive compensa- 
tion at the rate now or hereafter fixed by law for grade GS-18 of the 
general schedule established by the Classification Act of 1949, as 
amended." Under subsequent legislation (5 U.S.C. 5315 (97) ) , the posi- 
tion of Commissioner of Social Security is established at level IV of 
the Executive Schedule.] 

Duties of the Secretary 

Sec. 702. The Secretary of Health, Education, and Welfare shall 
perform the duties imposed upon him by this Act, shall also have 
the duty of studying and making recommendations as to the most 
effective methods of providing economic security through social in- 
surance, and as to legislation and matters of administrative policy 
concerning old-age pensions, unemployment compensation, accident 
compensation, and related subjects. 

Expenses of the Secretary 

Sec. 703. The Secretary is authorized to appoint and fix the com- 
pensation of such officers and employees, and to make such expendi- 
tures, as may be necessary for carrying out his functions under this 
Act. Appointments of attorneys and experts may be made without 
regard to the civil service laws. 

■ • 

1 This table of contents does not appear in the law. 

(269) 



Sec. 704 



270 



Reports 

Sec. 704. The Secretary shall make a full report to Congress, at the 
beginning of each regular session, of the administration of the func- 
tions with which he is charged under this Act. In addition to the 
number of copies of such report authorized by other law to be printed, 
there is hereby authorized to be printed not more than five thousand 
copies of such report for use by the Secretary for distribution to 
Members of Congress and to State and other public or private agen- 
cies or organizations participating in or concerned with the social 
security program. 

Training Grants for Public Welfare Personnel 

Sec. 705. (a) In order to assist in increasing the effectiveness and 
efficiency of administration of public assistance programs by increas- 
ing the number of adequately trained public welfare personnel avail- 
able for work in public assistance programs, there are hereby author- 
ized to be appropriated for the fiscal year ending June 30, 1963, the 
sum of $3,500,000, and for each fiscal year thereafter the sum of 
$5,000,000. 

(b) Such portion of the sums appropriated pursuant to subsection 
(a) for any fiscal year as the Secretary may determine, but not in 
excess of $1,000,000 in the case of the fiscal year ending June 30, 1963, 
and $2,000,000 in the case of any fiscal year thereafter, shall be avail- 
able for carrying out subsection (f ). From the remainder of the sums 
so appropriated for any fiscal year, the Secretary shall make allot- 
ments to the States on the basis of (1) population, (2) relative need 
for trained public welfare personnel, particularly for personnel to 
provide self-support and self -care services, and (3) financial need. 

(c) From each State's allotment under subsection (b), the Secre- 
tary shall from time to time pay to such State its costs of carrying out 
the purposes of this section through (1) grants to public or other 
nonprofit institutions of higher learning for training personnel em- 
ployed or preparing for employment in public assistance programs, 
(2) special courses of study or seminars of short duration conducted 
for such personnel by experts hired on a temporary basis for the pur- 
pose, and (3) establishing and maintaining, directly or through grants 
to such institutions, fellowships or traineeships for such personnel at 
such institutions, with such stipends and allowances as may be per- 
mitted under regulations of the Secretary. 

(d) Payments pursuant to subsection (c) shall be made in advance 
on the basis of estimates by the Secretary and adjustments may be 
made in future payments under this section to take account of over- 
payments or underpayments in amounts previously paid. 



271 Sec. 705(f) 

(e) The amount of any allotment to a State under subsection (b) 
for any fiscal year which the State certifies to the Secretary will not be 
required for carrying out the purposes of this section in such State 
shall be available for reallotment from time to time, on such dates as 
the Secretary may fix, to other States which the Secretary determines 
have need in carrying out such purposes for sums in excess of those 
previously allotted to them under this section and will be able to use 
such excess amounts during such fiscal year; such reallotments to be 
made on the basis provided in subsection (b) for the initial allotments 
to the States. Any amount so reallotted to a State shall be deemed part 
of its allotment under such subsection. 

(f ) (1) The portion of the sums appropriated for any fiscal year 
which is determined by the Secretary under the first sentence of sub- 
section (b) to be available for carrying out this subsection shall be 
available to enable him to provide (A) directly or through grants to 
or contracts with public or nonprofit private institutions of higher 
learning, for training personnel who are employed or preparing for 
employment in the administration of public assistance programs, (B) 
directly or through grants to or contracts with public or nonprofit 
private agencies or institutions, for special courses of study or semi- 
nars of short duration (not in excess of one year) for training of such 
personnel, and (C) directly or through grants to or contracts with pub- 
lic or nonprofit private institutions of higher learning, for establishing 
and maintaining fellowships or traineeships for such personnel at 
such institutions, with such stipends and allowances as may be per- 
mitted by the Secretary. 

(2) Payments under paragraph (1) may be made in advance on 
the basis of estimates by the Secretary, or may be made by way of re- 
imbursement, and adjustments may be made in future payments under 
this subsection to take account of overpayments or underpayments in 
amounts previously paid. 

(3) The Secretary may, to the extent he finds such action to be nec- 
essary, prescribe requirements to assure that any individual will repay 
the amount of his fellowship or traineeship received under this sub- 
section to the extent such individual fails to serve, for the period pre- 
scribed by the Secretary, with a State or political subdivision thereof, 
or with the Federal Government, in connection with administration 
of any State or local public assistance program. The Secretary may 
relieve any individual of his obligation to so repay, in whole or in part, 
whenever and to the extent that requirement of such repayment would, 
in his judgment, be inequitable or would be contrary to the purposes 
of any of the public welfare programs established by this Act. 



Sec. 706(a) 



272 



Advisory Council on Social Security 

Sec. 706. (a) During 1969 (but not before February 1, 1969) and 
every fourth year thereafter (but not before February 1 of such fourth 
year), the Secretary shall appoint an Advisory Council on Social 
Security for the purpose of reviewing the status of the Federal Old- 
Age and Survivors Insurance Trust Fund, the Federal Disability 
Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, 
and the Federal Supplementary Medical Insurance Trust Fund in 
relation to the long-term commitments of the old-age, survivors, and 
disability insurance program and the programs under parts A and B 
of title XVIII, and of reviewing the scope of coverage and the ade- 
quacy of benefits under, and all other aspects of, these programs, in- 
cluding their impact on the public assistance programs under this Act. 

(b) Each such Council shall consist of a Chairman and 12 other 
persons, appointed by the Secretary without regard to the provisions 
of title 5, United States Code, governing appointments in the competi- 
tive service. The appointed members shall, to the extent possible, rep- 
resent organizations of employers and employees in equal numbers 
and represent self-employed persons and the public. 

(c) (1) Any Council appointed hereunder is authorized to engage 
such technical assistance, including actuarial services, as may be re- 
quired to carry out its functions, and the Secretary shall, in addition, 
make available to such Council such secretarial, clerical, and other 
assistance and such actuarial and other pertinent data prepared by the 
Department of Health, Education, and Welfare as it may require to 
carry out such functions. 

(2) Appointed members of any such Council, while serving on 
business of the Council (inclusive of travel time) shall receive com- 
pensation at rates fixed by the Secretary, but not exceeding $100 per 
day and, while so serving away from their homes or regular places of 
business, they may be allowed travel expenses, including per diem in 
lieu of subsistence, as authorized by section 5703 of title 5, United 
States Code, for persons in the Government employed intermittently. 

(d) Each such Council shall submit reports (including any in- 
terim reports such Council may have issued) of its findings and rec- 
ommendations to the Secretary not later than January 1 of the second 
year after the year in which it is appointed, and such reports and 
recommendations shall thereupon be transmitted to the Congress and 
to the Board of Trustees of each of the Trust Funds. The reports re- 
quired by this subsection shall include — 

(1) a separate report with respect to the old-age, survivors, 
and disability insurance program under title II and of the taxes 
imposed under sections 1401(a), 3101(a), and 3111(a) of the 
Internal Kevenue Code of 1954, 



273 



Sec. 707(d) 



(2) a separate report with respect to the hospital insurance 
program under part A of title XVIII and of the taxes imposed by 
sections 1401(b), 3101(b), and 3111(b) of the Internal Revenue 
Code of 1954, and 

(3) a separate report with respect to the supplementary medical 
insurance program established by part B of title XVIII and of 
the financing thereof. 

After the date of the transmittal to the Congress of the reports required 
by this subsection, the Council shall cease to exist. 

Grants for Expansion and Development of Undergraduate and 

Graduate Programs 

Sec. 707. (a) There is authorized to be appropriated $5,000,000 
for the fiscal year ending June 30, 1969, and $5,000,000 for each of 
the three succeeding fiscal years, for grants by the Secretary to public 
or nonprofit private colleges and universities and to accredited grad- 
uate schools of social work or an association of such schools to meet 
part of the costs of development, expansion, or improvement of (re- 
spectively) undergraduate programs in social work and programs 
for the graduate training of professional social work personnel, in- 
cluding the costs of compensation of additional faculty and admin- 
istrative personnel and minor improvements of existing facilities. Not 
less than one-half of the sums appropriated for any fiscal year under 
the authority of this subsection shall be used by the Secretary for 
grants with respect to undergraduate programs. 

(b) In considering applications for grants under this section, the 
Secretary shall take into account the relative need in the States for 
personnel trained in social work and the effect of the grants thereon. 

(c) Payment of grants under this section may be made (after 
necessary adjustments on account of previously made overpayments 
or underpayments) in advance or by way of reimbursement, and on 
such terms and conditions and in such installments, as the Secretary 
may determine. 

(d) For purposes of this section — 

(1) the term "graduate school of social work" means a de- 
partment, school, division, or other administrative unit, in a 
public or nonprofit private college or university, which provides, 
primarily or exclusively, a program of education in social work 
and allied subjects leading to a graduate degree in social work; 

(2) the term "accredited" as applied to a graduate school of 
social work refers to a school which is accredited by a body or 
bodies approved for the purpose by the Commissioner of Educa- 
tion or with respect to which there is evidence satisfactory to the 



Sec. 707(d) 



274 



Secretary that it will be so accredited within a reasonable time; 
and 

(3) the term "nonprofit" as applied to any college or university 
refers to a college or university which is a corporation or asso- 
ciation, or is owned and operated by one or more corporations or 
associations, no part of the net earnings of which inures, or may 
lawfully inure, to the benefit of any private shareholder or 
individual. 

TITLE VIII— TAXES WITH RESPECT TO EMPLOYMENT 

[Note. — The provisions of this title are now contained in, and are superseded 
by, chapter 21 of the Internal Revenue Code of 1954.] 



TITLE IX— MISCELLANEOUS PROVISIONS RELATING TO 

EMPLOYMENT SECURITY 

Page 1 

Sec. 901. Employment Security Administration Account 275 

(a) Establishment of Account 275 

(b) Appropriations to Account 275 

(c) Administrative Expenditures 276 

(d) Additional Tax Attributable to Reduced Credits 278 

(e) Revolving Fund 278 

(f) Determination of Excess and Amount To Be Retained 

in Employment Security Administration Account 279 

Sec. 902. Transfers Between Federal Unemployment Account and Em- 
ployment Security Administration Account 281 

(a) Transfers to Federal Unemployment Account 281 

(b) Transfers to Employment Security Administration Ac- 

count 281 

(c) Report to the Congress 281 

Sec. 903. Amounts Transferred to State Accounts 282 

(a) In General 282 

(b) Limitations on Transfers 282 

(c) Use of Transferred Amounts 283 

Sec. 904. Unemployment Trust Fund 284 

(a) Establishment, etc 284 

(b) Investments 284 

(c) Sale or Redemption of Obligations 285 

(d) Treatment of Interest and Proceeds 285 

(e) Separate Book Accounts 285 

(f) Payments to State Agencies and Railroad Retirement 

Board 285 

(g) Federal Unemployment Account 286 

Sec. 905. Extended Unemployment Compensation Account 286 

(a) Establishment of Account 286 

(b) Transfers to Account 286 

(c) Transfers to State Accounts 287 

(d) Advances to Extended Unemployment Compensation 

Account and Repayment 287 

Sec. 906. Unemployment Compensation Research Program 288 

Sec. 907. Personnel Training 288 

Sec. 908. Federal Advisory Council 289 

Employment Security Administration Account 

Establishment of Account 

Section 901. (a) There is hereby established in the Unemployment 
Trust Fund an employment security administration account. 

Appropriations to Account 

(b) (1) There is hereby appropriated to the Unemployment Trust 
Fund for credit to the employment security administration account, 



1 This table of contents does not appear in the law. 

(275) 



Sec. 901(c) 276 

out of any moneys in the Treasury not otherwise appropriated, for 
the fiscal year ending June 30, 1961, and for each fiscal year there- 
after, an amount equal to 100 per centum of the tax (including inter- 
est, penalties, and additions to the tax) received during the fiscal year 
under the Federal Unemployment Tax Act and covered into the 
Treasury. 

(2) The amount appropriated by paragraph ( 1 ) shall be transferred 
at least monthly from the general fund of the Treasury to the Unem- 
ployment Trust Fund and credited to the employment security admin- 
istration account. Each such transfer shall be based on estimates made 
by the Secretary of the Treasury of the amounts received in the Treas- 
ury. Proper adjustments shall be made in the amounts subsequently 
transferred, to the extent prior estimates (including estimates for the 
fiscal year ending June 30, 1960) were in excess of or were less than 
the amounts required to be transferred. 

(3) The Secretary of the Treasury is directed to pay from time to 
time from the employment security administration account into the 
Treasury, as repayments to the account for refunding internal revenue 
collections, amounts equal to all refunds made after June 30, 1960, of 
amounts received as tax under the Federal Unemployment Tax Act 
(including interest on such refunds) . 

Administrative Expenditures 

(c)(1) There are hereby authorized to be made available for expend- 
iture out of the employment security administration account for the 
fiscal year ending June 30, 1971, and for each fiscal year thereafter — 

(A) such amounts (not in excess of the applicable limit pro- 
vided by paragraph (3) and, with respect to clause (ii), not in 
excess of the limit provided by paragraph (4) ) as the Congress 
may deem appropriate for the purpose of — 

(i) assisting the States in the administration of their un- 
employment compensation laws as provided in title III 
(including administration pursuant to agreements under any 
Federal unemployment compensation law) , 

(ii) the establishment and maintenance of systems of public 
employment offices in accordance with the Act of June 6, 1933, 
as amended (29 U.S.C., sees. 49-49n) , and 

(iii) carrying into effect section 2003 of title 38 of the 
United States Code ; 

(B) such amounts (not in excess of the limit provided by para- 
graph (4) with respect to clause (iii) ) as the Congress may deem 
appropriate for the necessary expenses of the Department of Labor 
for the performance of its functions under — 

(i) this title and titles III and XII of this Act, 



277 



Sec. 901(c) 



(ii) the Federal Unemployment Tax Act, 

(iii) the provisions of the Act of June 6, 1933, as amended, 

(iv) chapter 41 (except section 2003) of title 38 of the 
United States Code, and 

(v) any Federal unemployment compensation law. 

The term "necessary expenses" as used in this subparagraph (B) 
shall include the expense of reimbursing a State for salaries and 
other expenses of employees of such State temporarily assigned or 
detailed to duty with the Department of Labor and of paying such 
employees for travel expenses, transportation of household goods, 
and per diem in lieu of subsistence while away from their regular 
duty stations in the State, at rates authorized by law for civilian em- 
ployees of the Federal Government. 

(2) The Secretary of the Treasury is directed to pay from the em- 
ployment security administration account into the Treasury as miscel- 
laneous receipts the amount estimated by him which will be expended 
during a three-month period by the Treasury Department for the 
performance of its functions under — 

(A) this title and titles III and XII of this Act, including the 
expenses of banks for servicing unemployment benefit payment 
and clearing accounts which are offset by the maintenance of 
balances of Treasury funds with such banks, 

(B) the Federal Unemployment Tax Act, and 

(C) any Federal unemployment compensation law with re- 
spect to which responsibility for administration is vested in the 
Secretary of Labor. 

If it subsequently appears that the estimates under this paragraph in 
any particular period were too high or too low, appropriate adjust- 
ments shall be made by the Secretary of the Treasury in future 
payments. 

(3) (A) For purposes of paragraph (1)(A), the limitation 
on the amount authorized to be made available for any fiscal year after 
June 30, 1970, is, except as provided in subparagraph (B) and in the 
second sentence of section 901(f) (3) (A), an amount equal to 95 per- 
cent of the amount estimated and set forth in the budget of the United 
States Government for such fiscal year as the amount by which the net 
receipts during such year under the Federal Unemployment Tax Act 
will exceed the amount transferred under section 905(b) during such 
year to the extended unemployment compensation account. 

(B) The limitation established by subparagraph (A) is increased 
by any unexpended amount retained in the employment security ad- 
ministration account in accordance with section 901(f)(2)(B). 

(C) Each estimate of net receipts under this paragraph shall be 
based upon a tax rate of 0.5 percent. 



Sec. 901(d) 



278 



(4) For purposes of paragraphs (1) (A) (ii) and (1) (B) (iii) 
the amount authorized to be made available out of the employment 
security administration account for any fiscal year after June 30, 1972, 
shall reflect the proportion of the total cost of administering the sys- 
tem of public employment offices in accordance with the Act of June 6, 
1933, as amended, and of the necessary expenses of the Department 
of Labor for the performance of its functions under the provisions of 
such Act, as the President determines is an appropriate charge to the 
employment security administration account, and reflects in his annual 
budget for such year. The President's determination, after consulta- 
tion with the Secretary, shall take into account such factors as the 
relationship between employment subject to State laws and the total 
labor force in the United States, the number of claimants and the 
number of job applicants, and such other factors as he finds relevant. 

Additional Tax Attributable to Reduced Credits 

(d) (1) The Secretary of the Treasury is directed to transfer from 
the employment security administration account — 

(A) To the Federal unemployment account, an amount equal 
to the amount by which — 

(i) 100 per centum of the additional tax received under 
the Federal Unemployment Tax Act with respect to any 
State by reason of the reduced credits provisions of section 
3302(c)(3) of such Act and covered into the Treasury for 
the repayment of advances made to the State under section 
1201, exceeds 

(ii) the amount transferred to the account of such State 
pursuant to subparagraph (B) of this paragraph. 

Any amount transferred pursuant to this subparagraph shall be 
credited against, and shall operate to reduce, that balance of 
advances, made under section 1201 to the State, with respect to 
which employers paid such additional tax. 

(B) To the account (in the Unemployment Trust Fund) of 
the State with respect to which employers paid such additional 
tax an amount equal to the amount by which such additional tax 
received and covered into the Treasury exceeds that balance of 
advances, made under section 1201 to the State, with respect to 
which employers paid such additional tax. 

(2) Transfers under this subsection shall be as of the beginning of 
the month succeeding the month in which the moneys were credited to 
the employment security administration account pursuant to subsec- 
tion (b)(2). • iaifU 

Revolving Fund 

(e) (1) There is hereby established in the Treasury a revolving fund 
which shall be available to make the advances authorized by this sub- 



279 



Sec. 901(f) 



section. There are hereby authorized to be appropriated, without fiscal 
year limitation, to such revolving fund such amounts as may be neces- 
sary for the purposes of this section. 

(2) The Secretary of the Treasury is directed to advance from time 
to time from the revolving fund to the employment security admin- 
istration account such amounts as may be necessary for the purposes 
of this section. If the net balance in the employment security adminis- 
tration account as of the beginning of any fiscal year equals 40 percent 
of the amount of the total appropriation by the Congress out of the 
employment security administration account for the preceding fiscal 
year, no advance may be made under this subsection during such fiscal 
year. 

(3) Advances to the employment security administration account 
made under this subsection shall bear interest until repaid at a rate 
equal to the average rate of interest (computed as of the end of the 
calendar month next preceding the date of such advance) borne by all 
interest-bearing obligations of the United States then forming a part 
of the public debt ; except that where such average rate is not a mul- 
tiple of one-eighth of 1 per centum, the rate of interest shall be the 
multiple of one-eighth of 1 per centum next lower than such average 
rate. 

(4) Advances to the employment security administration account 
made under this subsection, plus interest accrued thereon, shall be 
repaid by the transfer from time to time, from the employment 
security administration account to the revolving fund, of such amounts 
as the Secretary of the Treasury, in consultation with the Secretary 
of Labor, determines to be available in the employment security ad- 
ministration account for such repayment. Any amount transferred as 
a repayment under this paragraph shall be credited against, and 
shall operate to reduce, any balance of advances (plus accrued inter- 
est) repayable under this subsection. 

Determination of Excess Amount To Be Retained in Employment Security 

Administration Account 

(f ) (1) The Secretary of the Treasury shall determine as of the 
close of each fiscal year (beginning with the fiscal year ending June 30, 
1961) the excess in the employment security administration account. 

(2) (A) Except as provided in subparagraph (B), the excess in the 
employment security administration account as of the close of any 
fiscal year is the amount by which the net balance in such account as 
of such time (after the application of section 902(b) and section 901 
(f)(3)(C)) exceeds the net balance in the employment security ad- 
ministration account as of the beginning of that fiscal year (includ- 
ing the fiscal year for which the excess is being computed) for which 



Sec. 901(f) 



280 



the net balance was higher than as of the beginning of any other such 
fiscal year. 

(B) With respect to the fiscal years ending June 30, 1970, June 30, 
1971, and June 30, 1972, the balance in the employment security 
administration account at the close of each such fiscal year shall not 
be considered excess but shall be retained in the account for use as 
provided in paragraph (1) of subsection (c). 

(3) (A) The excess determined as provided in paragraph (2) as of 
the close of any fiscal year after June 30, 1972, shall be retained (as of 
the beginning of the succeeding fiscal year) in the employment secu- 
rity administration account until the amount in such account is equal 
to 40 percent of the amount of the total appropriation by the Congress 
out of the employment security administration account for the fiscal 
year for which the excess is determined. Three-eighths of the amount 
in the employment security administration account as of the beginning 
of any fiscal year after June 30, 1972, or $150 million, whichever is the 
lesser, is authorized to be made available for such fiscal year pursuant 
to subsection (c) (1) for additional costs of administration due to an 
increase in the rate of insured unemployment for a calendar quarter 
of at least 15 percent over the rate of insured unemployment for the 
corresponding calendar quarter in the immediately preceding fiscal 
year. 

(B) If the entire amount of the excess determined as provided in 
paragraph (2) as of the close of any fiscal year after June 30, 1972, is 
not retained in the employment security administration account, there 
shall be transferred (as of the beginning of the succeeding fiscal year) 
to the extended unemployment compensation account the balance of 
such excess or so much thereof as is required to increase the amount 
in the extended unemployment compensation account to the limit pro- 
vided in section 905(b) (2). 

(C) If as of the close of any fiscal year after June 30, 1972, the 
amount in the extended unemployment compensation account exceeds 
the limit provided in section 905(b) (2), such excess shall be trans- 
ferred to the employment security administration account as of the 
close of such fiscal year. 

(4) For the purposes of this section, the net balance in the employ- 
ment security administration account as of any time is the amount in 
such account as of such time reduced by the sum of — 

(A) the amounts then subject to transfer pursuant to subsec- 
tion (d), and 

(B) the balance of advances (plus interest accrued thereon) 
then repayable to the revolving fund established by subsection 
(e). { 



281 



Sec. 902(c) 



The net balance in the employment security administration account 
as of the beginning of any fiscal year shall be determined after the 
disposition of the excess in such account as of the close of the preced- 
ing fiscal year. 

Transfers Between Federal Unemployment Account and 
Employment Security Administration Account 

Transfers to Federal Unemployment Account 

Sec. 902. (a) Whenever the Secretary of the Treasury determines 
pursuant to section 901(f) that there is an excess in the employment 
security administration account as of the close of any fiscal year and 
the entire amount of such excess is not retained in the employment 
security administration account or transferred to the extended un- 
employment compensation account as provided in section 901(f) (3), 
there shall be transferred (as of the beginning of the succeeding fiscal 
year) to the Federal unemployment account the balance of such ex- 
cess or so much thereof as is required to increase the amount in the 
Federal unemployment account to whichever of the following is the 
greater : 

(1) $550 million, or 

(2) the amount (determined by the Secretary of Labor and 
certified by him to the Secretary of the Treasury) equal to one- 
eighth of 1 percent of the total wages subject (determined with- 
out any information on amount) to contributions under all State 
unemployment compensation laws for the calendar year ending 
during the fiscal year for which the excess is determined. 

Transfers to Employment Security Administration Account 

(b) The amount, if any, by which the amount in the Federal un- 
employment account as of the close of any fiscal year exceeds the 
greater of the amounts specified in paragraphs (1) and (2) of sub- 
section (a) shall be transferred to the employment security adminis- 
tration account as of the close of such fiscal year. 

Report to the Congress 

(c) Whenever the Secretary of Labor has reason to believe that 
in the next fiscal year the employment security administration ac- 
count will reach the limit provided for such account in section 901(f) 
(3) (A), and the Federal unemployment account will reach the limit 
provided for such account in section 902(a), and the extended unem- 
ployment compensation account will reach the limit provided for such 
account in section 905(b)(2), he shall, after consultation with the 
Secretary of the Treasury, so report to the Congress with a recom- 
mendation for appropriate action by the Congress. 



64-310 O - 76 - 19 



Sec. 903(a) 



282 



Amounts Transferred to State Accounts 

In General 

Sec. 903. (a)(1) If as of the close of any fiscal year after the 
fiscal year ending June 30, 1972, the amount in the extended unem- 
ployment compensation account has reached the limit provided in sec- 
tion 905(b) (2)' and the amount in the Federal unemployment account 
has reached the limit provided in section 902(a) and all advances pur- 
suant to section 905(d) and section 1203 have been repaid, and there 
remains in the employment security administration account any 
amount over the amount provided in section 901(f) (3) (A), such ex- 
cess amount, except as provided in subsection (b), shall be transferred 
(as of the beginning of the succeeding fiscal year) to the accounts of 
the States in the Unemployment Trust Fund. 

(2) Each State's share of the funds to be transferred under this 
subsection as of any July 1 — 

(A) shall be determined by the Secretary of Labor and certi- 
fied by him to the Secretary of the Treasury before that date on 
the basis of reports furnished by the States to the Secretary of 
Labor before June 1, and 

(B) shall bear the same ratio to the total amount to be so 
transferred as the amount of wages subject to contributions under 
such State's unemployment compensation law during the preced- 
ing calendar year which have been reported to the State before 
May 1 bears to the total of wages subject to contributions under 
all State unemployment compensation laws during such calendar 
year which have been reported to the States before May 1. 

Limitation on Transfers 

(b) (1) If the Secretary of Labor finds that on July 1 of any fiscal 
year — 

(A) a State is not eligible for certification under section 303, or 

(B) the law of a State is not approvable under section 3304 
of the Federal Unemployment Tax Act, 

then the amount available for transfer to such State's account shall, 
in lieu of being so transferred, be transferred to the Federal unem- 
ployment account as of the beginning of such July 1. If, during the 
fiscal year beginning on such July 1, the Secretary of Labor finds and 
certifies to the Secretary of the Treasury that such State is eligible for 
certification under section 303, that the law of such State is approvable 
under such section 3304, or both, the Secretary of the Treasury shall 
transfer such amount from the Federal unemployment account to the 
account of such State. If the Secretary of Labor does not so find and 
certify to the Secretary of the Treasury before the close of such fiscal 
year then the amount which was available for transfer to such State's 



283 



Sec. 903(c) 



account as of July 1 of such fiscal year shall (as of the close of such 
fiscal year) become unrestricted as to use as part of the Federal unem- 
ployment account. 

(2) The amount which, but for this paragraph, would be trans- 
ferred to the account of a State under subsection (a) or paragraph (1) 
of this subsection shall be reduced (but not below zero) by the balance 
of advances made to the State under section 1201. The sum by which 
such amount is reduced shall — 

(A) be transferred to or retained in (as the case may be) the 
Federal unemployment account, and 

( B ) be credited against, and operate to reduce — 

(i) first, any balance of advances made before the date of 
the enactment of the Employment Security Act of 1960 to 
the State under section 1201, and 

(ii) second, any balance of advances made on or after 
such date to the State under section 1201. 

(3) [Kepealed.] 

Use of Transferred Amounts 

(c) (1) Except as provided in paragraph (2), amounts transferred 
to the account of a State pursuant to subsections (a) and (b) shall be 
used only in the payment of cash benefits to individuals with respect 
to their unemployment, exclusive of expenses of administration. 

(2) A State may, pursuant to a specific appropriation made by the 
legislative body of the State, use money withdrawn from its account 
in the payment of expenses incurred by it for the administration of 
its unemployment compensation law and public employment offices if 
and only if — 

(A) the purposes and amounts were specified in the law mak- 
ing the appropriation, 

(B) the appropriation law did not authorize the obligation of 
such money after the close of the two-year period which began on 
the date of enactment of the appropriation law, 

(C) the money is withdrawn and the expenses are incurred 
after such date of enactment, and 

(D) the appropriation law limits the total amount which may 
be obligated during a fiscal year to an amount which does not 
exceed the amount by which (i) the aggregate of the amounts 
transferred to the account of such State pursuant to subsections 
(a) and (b) during such fiscal year and the twenty-four preced- 
ing fiscal years, exceeds (ii) the aggregate of the amounts used by 
the State pursuant to this subsection and charged against the 
amounts transferred to the account of such State during such 
twenty-five fiscal years. 



Sec. 904(a) 



284 



For the purposes of subparagraph (D), amounts used by a State 
during any fiscal year shall be charged against equivalent amounts 
which were first transferred and which have not previously been so 
charged ; except that no amount obligated for administration during 
any fiscal year may be charged against any amount transferred dur- 
ing a fiscal year earlier than the twenty- fourth preceding fiscal year. 

Unemployment Trust Fund 

Establishment, etc. 

Sec. 904. (a) There is hereby established in the Treasury of the 
United States a trust fund to be known as the "Unemployment Trust 
Fund", hereinafter in this title called the "Fund". The Secretary of 
the Treasury is authorized and directed to receive and hold in the 
Fund all moneys deposited therein by a State agency from a State 
unemployment fund, or by the Railroad Retirement Board to the 
credit of the railroad unemployment insurance account or the railroad 
unemployment insurance administration fund, or otherwise deposited 
in or credited to the Fund or any account therein. Such deposit may 
be made directly with the Secretary of the Treasury, with any de- 
positary designated by him for such purpose, or with any Federal 
Reserve Bank. 

Investments 

(b) It shall be the duty of the Secretary of the Treasury to invest 
such portion of the Fund as is not, in his judgment, required to meet 
current withdrawals. Such investments may be made only in interest- 
bearing obligations of the United States or in obligations guaranteed 
as to both principal and interest by the United States. For such pur- 
pose such obligations may be acquired (1) on original issue at the 
issue price, or (2) by purchase of outstanding obligations at the 
market price. The purposes for which obligations of the United States 
may be issued under the Second Liberty Bond Act, as amended, are 
hereby extended to authorize the issuance at par of special obliga- 
tions exclusively to the Fund. Such special obligations shall bear in- 
terest at a rate equal to the average rate of interest, computed as of 
the end of the calendar month next preceding the date of such issue, 
borne by all interest-bearing obligations of the United States then 
forming part of the public debt ; except that where such average rate 
is not a multiple of one-eighth of 1 per centum, the rate of interest 
of such special obligations shall be the multiple of one-eighth of 1 per 
centum next lower than such average rate. Obligations other than such 
special obligations may be acquired for the Fund only on such terms 
as to provide an investment yield not less than the yield which would 



285 



Sec. 904(f) 



be required in the case of special obligations if issued to the Fund 
upon the date of such acquisition. Advances made to the Federal un- 
employment account pursuant to section 1203 shall not be invested. 

Sale or Redemption of Obligations 

(c) Any obligations acquired by the Fund (except special obliga- 
tions issued exclusively to the Fund) may be sold at the market price, 
and such special obligations may be redeemed at par plus accrued 
interest. 

Treatment of Interest and Proceeds 

(d) The interest on, and the proceeds from the sale or redemption 
of, any obligations held in the Fund shall be credited to and form a 
part of the Fund. 

Separate Book Accounts 

(e) The Fund shall be invested as a single fund, but the Secretary 
of the Treasury shall maintain a separate book account for each State 
agency, the employment security administration account, the Federal 
unemployment account, the railroad unemployment insurance account, 
and the railroad unemployment insurance administration fund and 
shall credit quarterly (on March 31, June 30, September 30, and De- 
cember 31, of each year) to each account, on the basis of the average 
daily balance of such account, a proportionate part of the earnings of 
the Fund for the quarter ending on such date. For the purpose of this 
subsection the average daily balance shall be computed — 

(1) in the case of any State account, by reducing (but not below 
zero) the amount in the account by the balance of advances made 
to the State under section 1201, and 

(2) in the case of the Federal unemployment account — 

(A) by adding to the amount in the account the aggregate 
of the reductions under paragraph (1) , and 

(B) by subtracting from the sum so obtained the balance 
of advances made under section 1203 to the account. 

Payments to State Agencies and Railroad Retirement Board 

(f) The Secretary of the Treasury is authorized and directed to 
pay out of the Fund to any State agency such amount as it may duly 
requisition, not exceeding the amount standing to the account of such 
State agency at the time of such payment. The Secretary of the 
Treasury is authorized and directed to make such payments out of the 
railroad unemployment insurance account for the payment of bene- 
fits, and out of the railroad unemployment insurance administration 
fund for the payment of administrative expenses, as the Railroad 
Retirement Board may duly certify, not exceeding the amount stand- 



Sec. 904(g) 



286 



ing to the credit of such account or such fund, as the case may be, at 
the time of such payment. 

Federal Unemployment Account 

(g) There is hereby established in the Unemployment Trust Fund 
a Federal unemployment account. There is hereby authorized to be 
appropriated to such Federal unemployment account a sum equal to 
(1) the excess of taxes collected prior to July 1, 1946, under title IX 
of this Act or under the Federal Unemployment Tax Act, over the 
total unemployment administrative expenditures made prior to 
July 1, 1946, plus (2) the excess of taxes collected under the Federal 
Unemployment Tax Act after June 30, 1946, and prior to July 1, 1953, 
over the unemployment administrative expenditure made after 
June 30, 1946, and prior to July 1, 1953. As used in this subsection, the 
term "unemployment administrative expenditures" means expendi- 
tures for -grants under title III of this Act, expenditures for the 
administration of that title by the Social Security Board, the Federal 
Security Administrator, or the Secretary of Labor, and expenditures 
for the administration of title IX of this Act, or of the Federal Un- 
employment Tax Act, by the Department of the Treasury, the Social 
Security Board, the Federal Security Administrator, or the Secretary 
of Labor. For the purposes of this subsection, there shall be deducted 
from the total amount of taxes collected prior to July 1, 1943, under 
title IX of this Act, the sum of $40,561,886.43 which was authorized 
to be appropriated by the Act of August 24, 1937 (50 Stat. 754), and 
the sum of $18,451,846 which was authorized to be appropriated by 
section 11(b) of the Railroad Unemployment Insurance Act. 

Extended Unemployment Compensation Account 

Establishment of Account 

Sec. 905. (a) There is hereby established in the Unemployment 
Trust Fund an extended unemployment compensation account. For 
the purposes provided for in section 904(e), such account shall be 
maintained as a separate book account. 

Transfers to Account 

(b)(1) Except as provided by paragraph (3), the Secretary of 
the Treasury shall transfer (as of the close of July 1970, and each 
month thereafter), from the employment security administration ac- 
count to the extended unemployment compensation account estab- 
lished by subsection (a), an amount determined by him to be equal, 
in the case of any month before April 1972, to one-fifth, and in the 



287 



Sec. 905(d) 



case of any month after March 1972, to one-tenth, of the amount by 
which — 

(A) transfers to the employment security administration ac- 
count pursuant to section 901(b) (2) during such month, exceed 

(B) payments during such month from the employment secu- 
rity administration account pursuant to section 901(b)(3) 
and (d). 

If for any such month the payments referred to in subparagraph (B) 
exceed the transfers referred to in subparagraph ( A) , proper adjust- 
ments shall be made in the amounts subsequently transferred. In the 
case of any month after March 1973 and before April 1974, the first 
sentence of this paragraph shall be applied by substituting "thirteen 
fifty-eighths" for "one-tenth". 

(2) Whenever the Secretary of the Treasury determines pursuant 
to section 901(f) that there is an excess in the employment security 
administration account as of the close of any fiscal year beginning 
after June 30, 1972, there shall be transferred (as of the beginning 
of the succeeding fiscal year) to the extended unemployment com- 
pensation account the total amount of such excess or so much thereof 
as is required to increase the amount in the extended unemployment 
compensation account to whichever of the following is the greater : 

(A) $750,000,000, or 

(B) the amount (determined by the Secretary of Labor and 
certified by him to the Secretary of the Treasury) equal to one- 
eighth of 1 percent of the total wages subject (determined with- 
out any limitation on amount) to contributions under all State 
unemployment compensation laws for the calendar year ending 
during the fiscal year for which the excess is determined. 

(3) The Secretary of the Treasury shall make no transfer pursuant 
to paragraph (1) as of the close of any month if he determines that 
the amount in the extended unemployment compensation account is 
equal to (or in excess of) the limitation provided in paragraph (2). 

Transfers to State Accounts 

(c) Amounts in the extended unemployment compensation account 
shall be available for transfer to the accounts of the States in the Un- 
employment Trust Fund as provided in section 204(e) of the Federal- 
State Extended Unemployment Compensation Act of 1970. 

Advances to Extended Unemployment Compensation Account and Repayment 

(d) There are hereby authorized to be appropriated, without fiscal 
year limitation, to the extended unemployment compensation account, 
as repayable advances (without interest), such sums as may be neces- 
sary to carry out the purposes of the Federal-State Extended Un- 



Sec. 906(a) 



288 



employment Compensation Act of 1970. Amounts appropriated as 
repayable advances shall be repaid, without interest, by transfers 
from the extended unemployment compensation account to the gen- 
eral fund of the Treasury, at such times as the amount in the extended 
unemployment compensation account is determined by the Secretary 
of the Treasury, in consultation with the Secretary of Labor, to be 
adequate for such purpose. Any amount transferred as a repayment 
under this subsection shall be credited against, and shall operate to 
reduce, any balance of advances repayable under this subsection. 

Unemployment Compensation Research Program 

Sec. 906. (a) The Secretary of Labor shall — 

(1) establish a continuing and comprehensive program of 
research to evaluate the unemployment compensation system. 
Such research shall include, but not be limited to, a program of 
factual studies covering the role of unemployment compensation 
under varying patterns of unemployment including those in sea- 
sonal industries, the relationship between the unemployment 
compensation and other social insurance programs, the effect of 
State eligibility and disqualification provisions, the personal 
characteristics, family situations, employment background and 
experience of claimants, with the results of such studies to be 
made public ; and 

(2) establish a program of research to develop information 
(which shall be made public) as to the effect and impact of ex- 
tending coverage to excluded groups with first attention to agri- 
cultural labor. 

(b) To assist in the establishment and provide for the continua- 
tion of the comprehensive research program relating to the unem- 
ployment compensation system, there are hereby authorized to be ap- 
propriated for the fiscal year ending June 30, 1971, and for each 
fiscal year thereafter, such sums, not to exceed $8,000,000, as may 
be necessary to carry out the purposes of this section. From the 
sums authorized to be appropriated by this subsection the Secretary 
may provide for the conduct of such research through grants or 
contracts. 

Personnel Training 

Sec. 907. (a) In order to assist in increasing the effectiveness 
and efficiency of administration of the unemployment compensation 
program by increasing the number of adequately trained personnel, 
the Secretary of Labor shall — 

(1) provide directly, through State agencies, or through con- 



289 



Sec. 908(a) 



tracts with institutions of higher education or other qualified 
agencies, organizations, or institutions, programs and courses de- 
signed to train individuals to prepare them, or improve their qual- 
ifications, for service in the administration of the unemployment 
compensation program, including claims determinations and ad- 
judication, with such stipends and allowances as may be permitted 
under regulations of the Secretary ; 

(2) develop training materials for and provide technical assist- 
ance to the State agencies in the operation of their training 
programs ; 

(3) under such regulations as he may prescribe, award fellow- 
ships and traineeships to persons in the Federal-State employ- 
ment security agencies, in order to prepare them or improve their 
qualifications for service in the administration of the unemploy- 
ment compensation program. 

(b) The Secretary may, to the extent that he finds such action to 
be necessary, prescribe requirements to assure that any person receiv- 
ing a fellowship, traineeship, stipend or allowance shall repay the 
costs thereof to the extent that such person fails to serve in the Federal- 
State employment security program for the period prescribed by the 
Secretary. The Secretary may relieve any individual of his obligation 
to so repay, in whole or in part, whenever and to the extent that such 
repayment would, in his judgment, be inequitable or would be con- 
trary to the purposes of any of the programs established by this 
section. 

(c) The Secretary, with the concurrence of the State, may detail 
Federal employees to State unemployment compensation administra- 
tion and the Secretary may concur in the detailing of State employees 
to the United States Department of Labor for temporary periods for 
training or for purposes of unemployment compensation administra- 
tion, and the provisions of section 507 of the Elementary and Second- 
ary Education Act of 1965 (79 Stat. 27) or any more general program 
of interchange enacted by a law amending, supplementing or replac- 
ing section 507 shall apply to any such assignment. 

(d) There are hereby authorized to be appropriated for the fiscal 
year ending June 30, 1971, and for each fiscal year thereafter such 
sums, not to exceed $5,000,000, as may be necessary to carry out the 
purposes of this section. 

Federal Advisory Council 

Sec. 908. (a) The Secretary of Labor shall establish a Federal 
Advisory Council, of not to exceed 16 members including the chair- 
man, for the purpose of reviewing the Federal-State program of un- 



Sec. 908(b) 



290 



employment compensation and making recommendations to him for 
improvement of the system. 

(b) The Council shall be appointed by the Secretary without regard 
to the civil service laws and shall consist of men and women who shall 
be representatives of employers and employees in equal numbers, and 
the public. 

(c) The Secretary may make available to the Council an Executive 
Secretary and secretarial, clerical, and other assistance, and such perti- 
nent data prepared by the Department of Labor, as it may require to 
carry out its functions. 

(d) Members of the Council shall, while serving on business of the 
Council, be entitled to receive compensation at rates fixed by the Sec- 
retary, but not exceeding $100 per day, including travel time; and 
while so serving away from their homes or regular places of business, 
they may be allowed travel expenses, including per diem in lieu of 
subsistence, as authorized by 5 U.S.C. 5703(b) for persons in govern- 
ment service employed intermittently. 

(e) The Secretary shall encourage the organization of similar State 
advisory councils. 

(f) There are hereby authorized to be appropriated for the fiscal 
year ending June 30, 1971, and for each fiscal year thereafter such 
sums, not to exceed $100,000, as may be necessary to carry out the 
purposes of this section. 



TITLE X— GEANTS TO STATES FOE AID TO THE BLIND 1 



Page 3 



Sec. 1001. Appropriation 

Sec. 1002. State Plans for Aid to the Blind- 
Sec. 1003. Payment to States 

Sec. 1004. Operation of State Plans 

Sec. 1005. Appropriation for Administration 
Sec. 1006. Definition of "Aid to the Blind"— 



291 
291 
293 
298 
298 
298 



Appropriation 



Section 1001. For the purpose of enabling each State to furnish 
financial assistance, as far as practicable under the conditions in such 
State, to needy individuals who are blind and of encouraging each 
State, as far as practicable under such conditions, to furnish rehabili- 
tation and other services to help such individuals attain or retain 
capability for self-support or self -care, there is hereby authorized to 
be appropriated for each fiscal year a sum sufficient to carry out the 
purposes of this title. The sums made available under this section 
shall be used for making payments to States which have submitted, 
and had approved by the Secretary of Health, Education, and Wel- 
fare, State plans for aid to the blind. 



Sec. 1002. (a) A State plan for aid to the blind must (1) except 
to the extent permitted by the Secretary with respect to services, pro- 
vide that it shall be in effect in all political subdivisions of the State, 
and, if administered by them, be mandatory upon them; (2) provide 
for financial participation by the State; (3) either provide for the 
establishment or designation of a single State agency to administer the 
plan, or provide for the establishment or designation of a single State 
agency to supervise the administration of the plan; (4) provide (A) 
for granting an opportunity for a fair hearing before the State agency 
to any individual whose claim for aid to the blind is denied or is not 
acted upon with reasonable promptness, and ( B ) that if the State plan 
is administered in each of the political subdivisions of the State by a 
local agency and such local agency provides a hearing at which evi- 
dence may be presented prior to a hearing before the State agency, 

iP.L. 92-603, sec. 303 repealed title X effective January 1, 1974, but such repeal does 
not apply to Puerto Rico, Guam, and the Virgin Islands. 
2 This table of contents does not appear in the law. 



State Plans for Aid to the Blind 



(291) 



Sec. 1002(a) 



292 



such local agency may put into effect immediately upon issuance its 
decision upon the matter considered at such hearing; (5) provide 
(A) such methods of administration (including after January 1, 1940, 
methods relating to the establishment and maintenance of personnel 
standards on a merit basis, except that the Secretary shall exercise no 
authority with respect to the selection, tenure of office, and compensa- 
tion of any individual employed in accordance with such methods) as 
are found by the Secretary to be necessary for the proper and efficient 
operation of the plan, and (B) for the training and effective use of 
paid subprofessional staff, with particular emphasis on the full-time 
or part-time employment of recipients and other persons of low-in- 
come, as community service aides, in the administration of the plan 
and for the use of nonpaid or partially paid volunteers in a social 
service volunteer program in providing services to applicants and re- 
cipients and in assisting any advisory committees established by the 
State agency; (6) provide that the State agency will make such re- 
ports, in such form and containing such information, as the Secretary 
may from time to time require, and comply with such provisions as 
the Secretary may from time to time find necessary to assure the cor- 
rectness and verification of such reports; and (7) provide that no aid 
will be furnished any individual under the plan with respect to any 
period with respect to which he is receiving old-age assistance under 
the State plan approved under section 2 of this Act or aid to families 
with dependent children under the State plan approved under section 
402 of this Act ; (8) provide that the State agency shall, in determin- 
ing need, take into consideration any other income and resources of the 
individual claiming aid to the blind, as well as any expenses reason- 
ably attributable to the earning of any such income, except that, in 
making such determination, the State agency (A) shall disregard the 
first $85 per month of earned income, plus one-half of earned income 
in excess of $85 per month, (B) shall, for a period not in excess of 
twelve months, and may, for a period not in excess of thirty-six months, 
disregard such additional amounts of other income and resources, in 
the case of an individual who has a plan for achieving self-support 
approved by the State agency, as may be necessary for the fulfillment 
of such plan, and (C) may, before disregarding the amounts referred 
to in clauses (A) and (B), disregard not more than $7.50 of any 
income; (9) provide safeguards which permit the use or disclosure 
of information concerning applicants or recipients only (A) to public 
officials who require such information in connection with their official 
duties, or (B) to other persons for purposes directly connected with 
the administration of the State plan; (10) provide that, in determin- 
ing whether an individual is blind, there shall be an examination by a 
physician skilled in diseases of the eye or by an optometrist, which- 
ever the individual may select ; (11 ) effective July 1, 1951, provide that 



293 



Sec. 1003(a) 



all individuals wishing to make application for aid to the blind shall 
have opportunity to do so, and that aid to the blind shall be furnished 
with reasonable promptness to all eligible individuals; (12) effective 
July 1, 1953, provide, if the plan includes payments to individuals in 
private or public institutions, for the establishment or designation of a 
State authority or authorities which shall be responsible for establish- 
ing and maintaining standards for such institutions ; and (13) provide 
a description of the services (if any) which the State agency makes 
available (using whatever internal organizational arrangement it finds 
appropriate for this purpose) to applicants for and recipients of aid 
to the blind to help them attain self-support or self-care, including a 
description of the steps taken to assure, in the provision of such serv- 
ices, maximum utilization of other agencies providing similar or re- 
lated services. 

(b) The Secretary shall approve any plan which fulfills the condi- 
tions specified in subsection (a), except that he shall not approve any 
plan which imposes, as a condition of eligibility for aid to the blind 
under the plan — 

(1) Any residence requirement which excludes any resident of 
the State who has resided therein five years during the nine years 
immediately preceding the application for aid and has resided 
therein continuously for one year immediately preceding the ap- 
plication; or 

(2) Any citizenship requirement which excludes any citizen of 
the United States. At the option of the State, the plan may pro- 
vide that manuals and other policy issuances will be furnished to 
persons without charge for the reasonable cost of such materials, 
but such provision shall not be required by the Secretary as a 
condition for the approval of such plan under this title. 

In the case of any State (other than Puerto Rico and the Virgin Is- 
lands) which did not have on January 1, 1949, a State plan for aid 
to the blind approved under this title, the Secretary shall approve a 
plan of such State for aid to the blind for purposes of this title, even 
though it does not meet the requirements of clause (8) of subsection 
(a) of this section, if it meets all other requirements of this title for 
an approved plan for aid to the blind; but payments under section 
1003 shall be made, in the case of any such plan, only with respect 
to expenditures thereunder which would be included as expenditures 
for the purposes of section 1003 under a plan approved under this sec- 
tion without regard to the provisions of this sentence. 

Payments to States 

Sec. 1003 (a) From the sums appropriated therefor, the Secretary 
of the Treasury shall pay to each State which has an approved plan for 



Sec. 1003(a) 



294 



aid to the blind, for each quarter, beginning with the quarter commenc- 
ing October 1, 1958— 

(1) in the case of any State other than Puerto Rico, the Vir- 
gin Islands, and Guam, an amount equal to the sum of the fol- 
lowing proportions of the total amounts expended during such 
quarter as aid to the blind under the State plan (including ex- 
penditures for premiums under part B of title XVIII for indi- 
viduals who are recipients of money payments under such plan 
and other insurance premiums for medical or any other type of 
remedial care or the cost thereof) — 

(A) 3 % 7 of such expenditures, not counting so much of 
any expenditure with respect to any month as exceeds the 
product of $37 multiplied by the total number of recipients 
of aid to the blind for such month (which total number, for 
purposes of this subsection, means (i) the number of indi- 
viduals who received aid to the blind in the form of money 
payments for such month, plus (ii) the number of other in- 
dividuals with respect to whom expenditures were made in 
such month as aid to the blind in the form of medical or any 
other type of remedial care) ; plus 

(B) the Federal percentage of the amount by which such 
expenditures exceed the maximum which may be counted 
under clause (A), not counting so much of any expenditure 
with respect to any month as exceeds the product of $75 
multiplied by the total number of such recipients of aid to 
the blind for such month ; and 

(2) in the case of Puerto Rico, the Virgin Islands, and Guam 
an amount equal to one-half of the total of the sums expended 
during such quarter as aid to the blind under the State plan (in- 
cluding expenditures for premiums under part B of title XVIII 
for individuals who are recipients of money payments under such 
plan and other insurance premiums for medical or any other type 
of remedial care or the cost thereof) , not counting so much of any 
expenditure with respect to any month as exceeds $37.50 multi- 
plied by the total number of recipients of aid to the blind for such 
month; and 

(3) in the case of any State whose State plan approved under 
section 1002 meets the requirements of subsection (c) (1) an 
amount equal to the sum of the following proportions of the total 
amounts expended during such quarter as found necessary by the 
Secretary of Health, Education, and Welfare for the proper and 
efficient administration of the State plan — 

(A) 75 per centum of so much of such expenditures as are 
for — 



295 



Sec. 1003(a) 



(i) services which are prescribed pursuant to subsec- 
tion (c)(1) and are provided (in accordance with the 
next sentence) to applicants for or recipients of aid to the 
blind to help them attain or retain capability for self- 
support or self -care, or 

(ii) other services, specified by the Secretary as likely 
to prevent or reduce dependency, so provided to such 
applicants or recipients, or 

(iii) any of the services prescribed pursuant to sub- 
section (c) (1), and of the services specified as provided 
in clause (ii), which the Secretary may specify as ap- 
propriate for individuals who, within such period or 
periods as the Secretary may prescribe, have been or are 
likely to become applicants for or recipients of aid to 
the blind, if such services are requested by such individ- 
uals and are provided to such individuals in accordance 
with the next sentence, or 

(iv) the training (including both short- and long-term 
training at educational institutions through grants to 
such institutions or by direct financial assistance to stu- 
dents enrolled in such institutions) of personnel em- 
ployed or preparing for employment by the State agency 
or by the local agency administering the plan in the po- 
litical subdivision ; plus 

(B) one-half of so much of such expenditures (not in- 
cluded under subparagraph ( A) ) as are for services provided 
(in accordance with the next sentence) to applicants for or 
recipients of aid to the blind, and to individuals requesting 
such services who (within such period or periods as the Secre- 
tary may prescribe) have been or are likely to become appli- 
cants for or recipients of such aid ; plus 

(C) one-half of the remainder of such expenditures. 

The services referred to in subparagraph (A) and (B) shall, ex- 
cept to the extent specified by the Secretary, include only — 

(D) services provided by the staff of the State agency, 
or of the local agency administering the State plan in the 
political subdivision: Provided, That no funds authorized 
under this title shall be available for services defined as voca- 
tional rehabilitation services under the Vocational Rehabili- 
tation Act (i) which are available to individuals in need of 
them under programs for their rehabilitation carried on 
under a State plan approved under such Act, or (ii) which 
the State agency or agencies administering or supervising 



Sec. 1003(b) 296 

the administration of the State plan approved under such Act 
are able and willing to provide if reimbursed for the cost 
thereof pursuant to agreement under subparagraph (E), if 
provided by such staff, and 

(E) prescribed by the Secretary, under conditions which 
shall be services which in the judgment of the State agency 
cannot be as economically or as effectively provided by the 
staff of such State or local agency and are not otherwise rea- 
sonably available to individuals in need of them, and which 
are provided, pursuant to agreement with the State agency, 
by the State health authority or the State agency or agencies 
administering or supervising the administration of the State 
plan for vocational rehabilitation services approved under 
the Vocational Rehabilitation Act or by any other State 
agency which the Secretary may determine to be appropriate 
(whether provided by its staff or by contract with public 
(local) or nonprofit private agencies) ; 
except that services described in clause (ii) of subparagraph (D) 
hereof may be provided only pursuant to agreement with such 
State agency or agencies administering or supervising the admin- 
istration of the State plan for vocational rehabilitation services 
so approved. The portion of the amount expended for administra- 
tion of the State plan to which subparagraph (A) applies and the 
portion thereof to which subparagraphs (B) and (C) apply 
shall be determined in accordance with such methods and pro- 
cedures as may be permitted by the Secretary ; and 

(4) in the case of any State whose State plan approved under 
section 1002 does not meet the requirements of subsection (c)(1), 
an amount equal to one-half of the total of the sums expended 
during such quarter as found necessary by the Secretary for the 
proper and efficient administration of the State plan, including 
services referred to in paragraph (3) and provided in accordance 
with the provisions of such paragraph, 
(b) The method of computing and paying such amounts shall be 
as follows: 

(1) The Secretary of Health, Education, and Welfare shall, 
prior to the beginning of each quarter, estimate the amount to be 
paid to the State for such quarter under the provisions of subsec- 
tion (a), such estimate to be based on (A) a report filed by the 
State containing its estimate of the total sum to be expended in 
such quarter in accordance with the provisions of such subsection, 
and stating the amount appropriated or made available by the 
State and its political subdivisions for such expenditures in such 
quarter, and if such amount is less than the State's proportionate 



297 



Sec. 1003(c) 



share of the total sum of such estimated expenditures, the source 
or sources from which the difference is expected to be derived, 
(B) records showing the number of blind individuals in the State, 
and (C) such other investigation as the Secretary may find 
necessary. 

(2) The Secretary of Health, Education, and Welfare shall 
then certify to the Secretary of the Treasury the amount so esti- 
mated by the Secretary of Health, Education, and Welfare, (A) 
reduced or increased, as the case may be, by any sum by which the 
Secretary of Health, Education, and Welfare finds that his esti- 
mate for any prior quarter was greater or less than the amount 
which should have been paid to the State under subsection (a) for 
such quarter, and (B) reduced by a sum equivalent to the pro rata 
share to which the United States is equitably entitled, as deter- 
mined by the Secretary of Health, Education, and Welfare, of the 
net amount recovered during a prior quarter by the State or any 
political subdivision thereof with respect to aid to the blind fur- 
nished under the State plan ; except that such increases or reduc- 
tions shall not be made to the extent that such sums have been 
applied to make the amount certified for any prior quarter greater 
or less than the amount estimated by the Secretary of Health, 
Education, and Welfare for such prior quarter : Provided, That 
any part of the amount recovered from the estate of a deceased 
recipient which is not in excess of the amount expended by the 
State or any political subdivision thereof for the funeral expenses 
of the deceased shall not be considered as a basis for reduction 
under clause (B) of this paragraph. 

(3) The Secretary of the Treasury shall thereupon, through 
the Fiscal Service of the Treasury Department, and prior to 
audit or settlement by the General Accounting Office, pay to the 
State, at the time or times fixed by the Secretary of Health, 
Education, and Welfare, the amounts so certified. 

(c) (1) In order for a State to qualify for payments under para- 
graph (3) of subsection (a), its State plan approved under section 
1002 must provide that the State agency shall make available to appli- 
cants for or recipients of aid to the blind at least those services to 
help them attain or retain capability for self-support or self-care 
which are prescribed by the Secretary. 

(2) In the case of any State whose State plan included a provision 
meeting the requirements of paragraph ( 1 ) , but with respect to which 
the Secretary finds, after reasonable notice and opportunity for hear- 
ings to the State agency administering or supervising the administra- 
tion of such plan, that — 

(A) the provision has been so changed that it no longer com- 
plies with the requirements of paragraph (1), or 



64-310 O - 76 - 20 



Sec. 1004 



298 



(B) in the administration of the plan there is a failure to com- 
ply substantially with such provision, 
the Secretary shall notify such State agency that further payments 
will not be made to the State under paragraph (3) of subsection (a) 
until he is satisfied that there will no longer be any such failure to 
comply. Until the Secretary is so satisfied further payments with 
respect to the administration of such State plan shall not be made 
under paragraph (3) of subsection (a) but shall instead be made, sub- 
ject to the other provisions of this title, under paragraph (4) of such 
subsection. 

Operation of State Plans 

Sec. 1004. In the case of any State plan for aid to the blind which 
has been approved by the Secretary of Health, Education, and Wel- 
fare, if the Secretary, after reasonable notice and opportunity for 
hearing to the State agency administering or supervising the adminis- 
tration of such plan, finds — 

(1) that the plan has been so changed as to impose any resi- 
dence or citizenship requirement prohibited by section 1002(b), 
or that in the administration of the plan any such prohibited 
requirement is imposed, with the knowledge of such State agency, 
in a substantial number of cases ; or 

(2) that in the administration of the plan there is a failure 
to comply substantially with any provision required by section 
1002(a) to be included in the plan ; 

the Secretary shall notify such State agency that further payments 
will not be made to the State (or, in his discretion, that payments will 
be limited to categories under or parts of the State plan not affected 
by such failure) until the Secretary is satisfied that such prohibited 
requirement is no longer so imposed, and that there is no longer any 
such failure to comply. Until he is so satisfied he shall make no further 
payments to such State (or shall limit payments to categories under 
or parts of the State plan not affected by such failure). 

Administration 

Sec. 1005. Executed. Authorized appropriation for administrative 
expenses of the Social Security Board for the fiscal year ending 
June 30, 1936. 

Definition 

Sec. 1006. For the purpose of this title, the term "aid to the blind" 
means money payments to, or (if provided in or after the third month 
before the month in which the recipient makes application for aid) 
medical care in behalf of or any type of remedial care recognized under 
State law in behalf of, blind individuals who are needy, but does not 
include any such payments to or care in behalf of any individual who 



299 



Sec. 1006 



is an inmate of a public institution (except as a patient in a medical 
institution) or any individual who is a patient in an institution for 
tuberculosis or mental diseases. Such term also includes payments 
which are not included within the meaning of such term under the 
preceding sentence, but which would be so included except that they 
are made on behalf of such a needy individual to another individual 
who (as determined in accordance with standards prescribed by the 
Secretary) is interested in or concerned with the welfare of such needy 
individual, but only with respect to a State whose State plan approved 
under section 1002 includes provision for — 

(1) determination by the State agency that such needy indi- 
vidual has, by reason of his physical or mental condition, such 
inability to manage funds that making payments to him would 
be contrary to his welfare and, therefore, it is necessary to provide 
such aid through payments described in this sentence ; 

(2) making such payments only in cases in which such pay- 
ments will, under the rules otherwise applicable under the State 
plan for determining need and the amount of aid to the blind to 
be paid (and in conjunction with other income and resources), 
meet all the need of the individuals with respect to whom such 
payments are made ; 

(3) undertaking and continuing special efforts to protect the 
welfare of such individual and to improve, to the extent possible, 
his capacity for self -care and to manage funds ; 

(4) periodic review by such State agency of the determina- 
tion under paragraph (1) to ascertain whether conditions justify- 
ing such determination still exist, with provision for termination 
of such payments if they do not and for seeking judicial appoint- 
ment of a guardian or other legal representative, as described in 
section 1111, if and when it appears that such action will best 
serve the interests of such needy individual ; and 

(5) opportunity for a fair hearing before the State agency on 
the determination referred to in paragraph (1) for any indi- 
vidual with respect to whom it is made. 

At the option of a State (if its plan approved under this title so 
provides), such term (i) need not include money payments to an indi- 
vidual who has been absent from such State for a period in excess of 
90 consecutive days (regardless of whether he has maintained his 
residence in such State during such period) until he has been present 
in such State for 30 consecutive days in the case of such an individual 
who has maintained his residence in such State during such period or 
90 consecutive days in the case of any other such individual and (ii) 
may include rent payments made directly to a public housing agenc)^ 
on behalf of a recipient or a group or groups of recipients of aid under 
such plan. 



TITLE XI— GENEKAL PROVISIONS AND PROFESSIONAL 

STANDARDS REVIEW 



Part A — General Provisions 

Page 1 

Sec. 1101. Definitions 302 

Sec. 1102. Rules and Regulations 304 

Sec. 1103. Separability 304 

Sec. 1104. Reservation of Power 304 

Sec. 1105. Short Title 304 

Sec. 1106. Disclosure of Information in Possession of Department 304 

Sec. 1107. Penalty for Fraud 306 

Sec. 1108. Limitation on Payments to Puerto Rico, the Virgin Islands, 

and Guam 307 

Sec. 1109. Amounts Disregarded Not To Be Taken Into Account in 

Determining Eligibility of Other Individuals 308 

Sec. 1110. Cooperative Research or Demonstration Projects 308 

Sec. 1111. Public Assistance Payments to Legal Representatives 309 

Sec. 1112. Medical Care Guides and Reports for Public Assistance and 

Medical Assistance 309 

Sec. 1113. Assistance for United States Citizens Returned From Foreign 

Countries 309 

Sec. 1114. Appointment of Advisory Council and Other Advisory 

Groups 310 

Sec. 1115. Demonstration Projects 312 

Sec. 1116. Administrative and Judicial Review of Certain Administrative 

Determinations 313 

Sec. 1117. [Repealed.] 

Sec. 1118. Alternative Federal Payment With Respect to Public Assist- 
ance Expenditures 314 

Sec. 1119. Federal Participation in Payments for Repairs to Home Owned 

by Recipient of Aid or Assistance 314 

Sec. 1120. Approval of Certain Projects 315 

Sec. 1121. [Repealed.] 

Sec. 1122. Limitation on Federal Participation for Capital Expenditures 315 

Sec. 1123. Program for Determining Qualifications for Certain Health Care 

Personnel „ 319 

Sec. 1130. [Repealed] 320 

Sec. 1131. Notification of Social Security Claimant With Respect to De- 
ferred Vested Benefits 320 

Part B — Professional Standards Review 

Sec. 1151. Declaration of Purpose 321 

Sec. 1152. Designation of Professional Standards Review Organizations 322 

Sec. 1153. Review Pending Designation of Professional Standards Review 

Organizations 325 

Sec. 1154. Trial Period for Professional Standards Review Organizations. 325 
Sec. 1155. Duties and Functions of Professional Standards Review Or- 
ganizations 326 

Sec. 1156. Norms of Health Care Services for Various Illnesses or Health 

Conditions 329 

Sec. 1157. Submission of Reports by Professional Standards Review Or- 
ganizations 331 

Sec. 1158. Requirement of Review Approval as Condition of Payment of 

Claims 331 



1 This table of contents does not appear In the law. 

C301) 



Sec. 1101(a) 



302 



Page 1 



Sec. 1159. Hearings and Review by Secretary 332 

Sec. 1160. Obligations of Health Care Practitioners and Providers of 
Health Care Services ; Sanctions and Penalties ; Hearings 

and Review 333 

Sec. 1161. Notice to Practitioner or Provider 335 

Sec. 1162. Statewide Professional Standards Review Councils ; Advisory 

Groups to Such Councils 335 

Sec. 1163. National Professional Standards Review Council 337 

Sec. 1164. Application of This Part to Certain State Programs Receiving 

Federal Financial Assistance 338 

Sec. 1165. Correlation of Functions Between Professional Standards Re- 
view Organizations and Administrative Instrumentalities — 339 

Sec. 1166. Prohibition Against Disclosure of Information 339 

Sec. 1167. Limitation on Liability for Persons Providing Information, and 
for Members and Employees of Professional Standards Re- 
view Organizations, and for Health Care Practitioners and 

Providers 339 

Sec. 1168. Authorization for Use of Certain Funds to Administer the 

Provisions of This Part 340 

Sec. 1169. Technical Assistance to Organizations Desiring to be Designated 

as Professional Standards Review Organizations 341 

Sec. 1170. Exemptions of Christian Science Sanatoriums 341 



Part A — General Provisions 
Definitions 
Sec. 1101. (a) When used in this Act — 

(1) The term "State", except where otherwise provided, includes 
the District of Columbia and the Commonwealth of Puerto Rico, and 
when used in titles IV, V, VII, XI, and XIX includes the Virgin 
Islands and Guam. Such term when used in title V also includes Amer- 
ican Samoa and the Trust Territory of the Pacific Islands. In the 
case of Puerto Rico, the Virgin Islands, and Guam, title I, X, and 
XIV, and title XVI, (as in effect without regard to the amend- 
ment made by section 301 of the Social Security Amendments of 1972) 

shall continue to apply, and the term "States" when used in such titles 
(but not in title XVI as in effect pursuant to such amendment after 
December 31, 1973) includes Puerto Rico, the Virgin Islands, and 
Guam. 

(2) The term "United States" when used in a geographical sense 
means, except when otherwise provided, the States. 

(3) The term "person" means an individual, a trust or estate, a 
partnerhip, or a corporation. 

(4) The term "corporation" includes associations, joint-stock com- 
panies, and insurance companies. 

(5) The term "shareholder" includes a member in an association, 
joint-stock company, or insurance company. 

(6) The term "Secretary", except when the context otherwise re- 
quires, means the Secretary of Health, Education, and Welfare. 



1 This table does not appear Id the law. 



303 



Sec. 1101(c) 



(7) The terms "physician" and "medical care" and "hospitaliza- 
tion" include osteopathic practitioners or the services of osteopathic 
practioners and hospitals within the scope of their practice as de- 
fined by State law. 

(8) (A) The "Federal percentage" for any State (other than 

Puerto Rico, the Virgin Islands, and Guam) shall be 100 per centum 

less the State percentage ; and the State percentage shall be that per- 
centage which bears the same ratio to 50 per centum as the square of 

the per capita income of such State bears to the square of the per 
capita income of the United States ; except that the Federal percent- 
age shall in no case be less than 50 per centum or more than 65 per 
centum. 

(B) The Federal percentage for each State (other than Puerto 
Rico, the Virgin Islands, and Guam) shall be promulgated by the 
Secretary between July 1 and August 31 of each even-numbered year, 
on the basis of the average per capita income of each State and of the 
United States for the three most recent calendar years for which satis- 
factory data are available from the Department of Commerce. Such 
promulgation shall be conclusive for each of the eight quarters in the 
period beginning July 1 next succeeding such promulgation : Provided, 
That the Secretary shall promulgate such percentage as soon as pos- 
sible after the enactment of the Social Security Amendments of 1958, 
which promulgation shall be conclusive for each of the eleven quarters 
in the period beginning October 1, 1958, and ending with the close of 
June 30, 1961. 

(C) The term "United States" means (but only for purposes of 
subparagraphs (A) and (B) of this paragraph) the fifty States and 
the District of Columbia. 

(D) Promulgations made before satisfactory data are available 
from the Department of Commerce for a full year on the per capita 
income of Alaska shall prescribe a Federal percentage for Alaska of 
50 per centum and, for purposes of such promulgations, Alaska shall 
not be included as part of the "United States." Promulgations made 
thereafter but before per capita income data for Alaska for a full 
three-year period are available from the Department of Commerce 
shall be based on satisfactory data available therefrom for Alaska for 
such one full year or, when such data are available for a two-year 
period, for such two years. 

(b) The terms "includes" and "including" when used in a definition 
contained in this Act shall not be deemed to exclude other things 
otherwise within the meaning of the term defined. 

(c) Whenever under this Act or any Act of Congress, or under the 
law of any State, an employer is required or permitted to deduct any 
amount from the remuneration of an employee and to pay the amount 



Sec. 1101(d) 



304 



deducted to the United States, a State, or any political subdivision 
thereof, then for the purposes of this Act the amount so deducted shall 
be considered to have been paid to the employee at the time of such 
deduction. 

(d) Nothing in this Act shall be construed as authorizing any Fed- 
eral official, agent, or representative, in carrying out any of the pro- 
visions of this Act, to take charge of any child over the objections of 
either of the parents of such child, or of the person standing in loco 
parentis to such child. 

Rules and Regulations 

Sec. 1102. The Secretary of the Treasury, the Secretary of Labor, 
and the Secretary of Health, Education, and Welfare, respectively, 
shall make and publish such rules and regulations, not inconsistent 
with this Act, as may be necessary to the efficient administration of 
the functions with which each is charged under this Act. 

Separability 

Sec. 1103. If any provision of this Act, or the application thereof to 
any person or circumstance, is held invalid, the remainder of the Act 
and the application of such provision to other persons or circum- 
stances shall not be affected thereby. 

Reservation of Power 

Sec. 1104. The right to alter, amend, or repeal any provision of this 
Act is hereby reserved to the Congress. 

Short Title 

Sec. 1105. This Act may be cited as the "Social Security Act." 

Disclosure of Information in Possession of Department 

Sec. 1106. (a) No disclosure of any return or portion of a return 
(including information returns and other written statements) filed 
with the Commissioner of Internal Revenue under title VIII of the 
Social Security Act or under subchapter E of chapter 1 or subchapter 
A of chapter 9 of the Internal Revenue Code of 1939, or under chapter 
2 or 21 or, pursuant thereto, under subtitle F of the Internal Revenue 
Code of 1954, or under regulations made under authority thereof, 
which has been transmitted to the Secretary of Health, Education, 
and Welfare by the Commissioner of Internal Revenue, or of any 
file, record, report, or other paper, or any information, obtained at any 
time by the Secretary or by any officer or employee of the Department 
of Health, Education, and Welfare in the course of discharging the 



305 



Sec. 1106(d) 



duties of the Secretary under this Act, and no disclosure of any such 
file, record, report, or other paper, or information, obtained at any 
time by any person from the Secretary or from any officer or employee 
of the Department of Health, Education, and Welfare, shall be made 
except as the Secretary may by regulations prescribe and except as 
provided in part D of title IV of this Act. Any person who shall vio- 
late any provision of this section shall be deemed guilty of a misde- 
meanor and, upon conviction thereof, shall be punished by a fine not 
exceeding $1,000, or by imprisonment not exceeding one year, or both. 

(b) Requests for information, disclosure of which is authorized by 
regulations prescribed pursuant to subsection (a) of this section, and 
requests for services, may, subject to such limitations as may be pre- 
scribed by the Secretary to avoid undue interference with his func- 
tions under this Act, be complied with if the agency, person, or organi- 
zation making the request agrees to pay for the information or services 
requested in such amount, if any (not exceeding the cost of furnishing 
the information or services), as may be determined by the Secretary. 
Payments for information or services furnished pursuant to this sec- 
tion shall be made in advance or by way of reimbursement, as may be 
requested by the Secretary, and shall be deposited in the Treasury as a 
special deposit to be used to reimburse the appropriations (including 
authorizations to make expenditures from the Federal Old- Age and 
Survivors Insurance Trust Fund, the Federal Disability Insurance 
Trust Fund, the Federal Hospital Insurance Trust Fund, and the Fed- 
eral Supplementary Medical Insurance Trust Fund) for the unit or 
units of the Department of Health, Education, and Welfare which 
furnished the information or services. Notwithstanding the preceding 
provisions of this subsection, requests for information made pursuant 
to the provisions of part D of title IV of this Act for the purpose of 
using Federal records for locating parents shall be complied with and 
the cost incurred in providing such information shall be paid for as 
provided in such part D of title IV. 

(c) [Repealed.] 

(d) Notwithstanding any other provision of this section the Sec- 
retary shall make available to each State agency operating a program 
under title XIX and shall, subject to the limitations contained in sub- 
section (e) , make available for public inspection in readily accessible 
form and fashion, the following official reports (not including, how- 
ever, references to any internal tolerance rules and practices that may 
be contained therein, internal working papers or other informal memo- 
randa) dealing with the operation of the health programs established 
by titles XVIII and XIX— 

(1) individual contractor performance reviews and other for- 
mal evaluations of the performance of carriers, intermediaries, 



Sec. 1106(e) 



306 



and State agencies, including the reports of follow-up reviews; 

(2) comparative evaluations of the performance of such con- 
tractors, including comparisons of either overall performance or 
of any particular aspects of contractor operation ; and 

(3) program validation survey reports and other formal eval- 
uations of the performance of providers of services, including 
the reports of follow-up reviews, except that such reports shall 
not identify individual patients, individual health care practition- 
ers, or other individuals. 

(e) No report described in subsection (d) shall be made public 
by the Secretary or the State title XIX agency until the contractor 
or provider of services whose performance is being evaluated has had 
a reasonable opportunity (not exceeding 60 days) to review such 
report and to offer comments pertinent parts of which may be incor- 
porated in the public report; nor shall the Secretary be required to 
include in any such report information with respect to any deficiency 
(or improper practice or procedures) which is known by the Secre- 
tary to have been fully corrected, within 60 days of the date such 
deficiency was first brought to the attention of such contractor or 
provider of services, as the case may be. 

Penalty for Fraud 

Sec. 1107. (a) Whoever, with the intent to defraud any person, 
shall make or cause to be made any false representation concerning 
the requirement of this Act, subchapter E of chapter 1 or subchapter 
A, C, or E of chapter 9 of the Internal Revenue Code of 1939, or 
chapter 2, 21, or 23 or section 6011(a), 6017, or 6051(a) of the In- 
ternal Revenue Code of 1954 or of any rules or regulations issued there- 
under, knowing such representations to be false, shall be deemed 
guilty of a misdemeanor, and upon conviction thereof, shall be pun- 
ished by a fine not exceeding $1,000, or by imprisonment not exceeding 
one year, or both. 

(b) Whoever, with the intent to elicit information as to the date of 
birth, employment, wages, or benefits of any individual (1) falsely 
represents to the Secretary of Health, Education, and Welfare that he 
is such individual, or the wife, husband, widow, widower, former wife 
divorced, child, or parent of such individual, or the duly authorized 
agent of such individual, or of the wife, husband, widow, widower, 
former wife divorced, child, or parent of such individual, or (2) 
falsely represents to any person that he is an employee or agent of 
the United States, shall be deemed guilty of a misdemeanor, and, 
upon conviction thereof, shall be punished by a fine not exceeding 
$1,000, or by imprisonment not exceeding one year, or both. 



307 



Sec. 1108(d) 



Limitation on Payments to Puerto Rico, the Virgin Islands, 

and Guam 

Sec. 1108. (a) Except as provided in 2002(a)(2)(D), the total 
amount certified by the Secretary of Health, Education, and Welfare 
under title I, X, XIV, and XVI, and under part A of title IV (exclu- 
sive of any amounts on account of services and items to which subsec- 
tion (b) applies) — 

( 1 ) for payment to Puerto Rico shall not exceed — 

(A) $12,500,000 with respect to the fiscal year 1968, 

(B) $15,000,000 with respect to the fiscal year 1969, 

(C) $18,000,000 with respect to the fiscal year 1970, 

(D) $21,000,000 with respect to the fiscal year 1971, or 

(E) $24,000,000 with respect to the fiscal year 1972 and 
each fiscal year thereafter; 

(2) for payment to the Virgin Islands shall not exceed — 

(A) $425,000 with respect to the fiscal year 1968, 

(B) $500,000 with respect to the fiscal year 1969, 

( C ) $600,000 with respect to the fiscal year 1970, 

(D) $700,000 with respect to the fiscal year 1971, or 

(E) $800,000 with respect to the fiscal year 1972 and each 
fiscal year thereafter; and 

) (3) for payment to Guam shall not exceed — 

(A) $575,000 with respect to the fiscal year 1968, 

( B ) $690,000 with respect to the fiscal year 1969, 

( C ) $825,000 with respect to the fiscal year 1970, 

(D) $960,000 with respect to the fiscal year 1971, or 

(E) $1,100,000 with respect to the fiscal year 1972 and each 
fiscal year thereafter. 

(b) The total amount certified by the Secretary under part A of 
title IV, on account of family planning services and services provided 
under section 402(a) (19) with respect to any fiscal year — 

(1) for payment to Puerto Rico shall not exceed $2,000,000, 

(2) for payment to the Virgin Islands shall not exceed $65,000, 
and 

(3) for payment to Guam shall not exceed $90,000. 

(c) The total amount certified by the Secretary under title XIX 
with respect to any fiscal year — 

(1) for payment to Puerto Rico shall not exceed $30,000,000, 

(2) for payment to the Virgin Islands shall not exceed $1,000,000, 
and 

(3) for payment to Guam shall not exceed $900,000. 

(d) Notwithstanding the provisions of section 502(a) and 512(a) 
of this Act, and the provisions of sections 421, 503(1), and 504(1) of 
this Act as amended by the Social Security Amendments o*f 1967, and 



Sec. 1109 



308 



until such time as the Congress may by appropriation or other law 
otherwise provide, the Secretary shall, in lieu of the initial allotment 
specified in such sections, allot such smaller amounts to Guam, Ameri- 
can Samoa, and the Trust Territory of the Pacific Islands as he may 
deem appropriate. 

Amounts Disregarded Not To Be Taken Into Account in Deter- 
mining Eligibility of Other Individuals 

Sec. 1109. Any amount which is disregarded (or set aside for future 
needs) in determining the eligibility of and amount of the aid or assist- 
ance for any individual under a State plan approved under title I, X, 
XIV, XVI, or XIX, or part A of title IV, shall not be taken into 
consideration in determining the eligibility of and amount of aid or 
assistance for any other individual under a State plan approved under 
any other of such titles. 

Cooperative Research or Demonstration Projects 

Sec. 1110. (a) There are hereby authorized to be appropriated for 
the fiscal year ending June 30, 1957, $5,000,000 and for each fiscal 
year thereafter such sums as the Congress may determine for (1) 
making grants to States and public and other nonprofit organiza- 
tions and agencies for payment part of the cost of research or demon- 
stration projects such as those relating to the prevention and reduc- 
tion of dependency, or which will aid in effecting coordination of 
planning between private and public welfare agencies or which will 
help improve the administration and effectiveness of programs car- 
ried on or assisted under the Social Security Act and programs re- 
lated thereto, and (2) making contracts or jointly financed cooperative 
arrangements with States and public and other organizations and 
agencies for the conduct of research or demonstration projects relating 
to such matters. 

(b) No contract or jointly financed cooperative arrangement shall 
be entered into, and no grant shall be made, under subsection (a), 
until the Secretary obtains the advice and recommendations of spe- 
cialists who are competent to evaluate the proposed project as to 
soundness of their design, the possibilities of securing productive re- 
sults, the adequacy of resources to conduct the proposed research or 
demonstrations, and their relationship to other similar research or 
demonstrations already completed or in process. 

(c) Grants and payments under contracts or cooperative arrange- 
ments under subsection (a) may be made either in advance or by way 
of reimbursement, as may be determined by the Secretary ; and shall 
be made in such installments and on such conditions as the Secretary 
finds necessary to carry out the purposes of this section. 



309 



Sec. 1113(a) 



Public Assistance Payments to Legal Representatives 

Sec. 1111. For purposes of titles I, X, XIV, and XVI, and Part A 
of title IV, payments on behalf of an individual, made to another 
person who has been judicially appointed, under the law of the State 
in which such individual resides, as legal representative of such indi- 
vidual for the purpose of receiving and managing such payments 
(whether or not he is such individual's legal representative for other 
purposes), shall be regarded as money payments to such individual. 

Medical Care Guides and Reports for Public Assistance and 

Medical Assistance 

Sec. 1112. In order to assist the States to extend the scope and 
content, and improve the quality, of medical care and medical serv- 
ices for which payments are made to or on behalf of needy and low- 
income individuals under this Act and in order to promote better 
public understanding about medical care and medical assistance for 
needy and low-income individuals, the Secretary shall develop and 
revise from time to time guides or recommended standards as to the 
level, content, and quality of medical care and medical services for 
the use of the States in evaluating and improving their public assist- 
ance medical care programs and their programs of medical assistance ; 
shall secure periodic reports from the States on items included in, 
and the quantity of, medical care and medical services for which ex- 
penditures under such programs are made; and shall from time to 
time publish data secured from these reports and other information 
necessary to carry out the purposes of this section. 

Assistance for United States Citizens Returned From Foreign 

Countries 

Sec. 1113. (a) (1) The Secretary is authorized to provide tempo- 
rary assistance to citizens of the United States and to dependents of 
citizens of the United States, if they (A) are identified by the De- 
partment of State as having returned, or been brought, from a foreign 
country to the United States because of the destitution of the citizen 
of the United States or the illness of such citizen or any of his depend- 
ents or because of war, threat of war, invasion, or similar crisis, and 
(B) are without available resources. 

(2) Except in such cases or classes of cases as are set forth in regu- 
lations of the Secretary, provision shall be made for reimbursement 
to the United States by the recipients of the temporary assistance to 
cover the cost thereof. 

(3) The Secretary may provide assistance under paragraph (1) 
directly or through utilization of the services and facilities of appro- 
priate public or private agencies and organizations, in accordance 



Sec. 1113(a) 



310 



with argeements providing for payment, in advance or by way of 
reimbursement, as may be determined by the Secretary, of the cost 
thereof. Such cost shall be determined by such statistical, sampling, 
or other method as may be provided in the agreement. 

(b) The Secretary is authorized to develop plans and make ar- 
rangements for provision of temporary assistance within the United 
States to individuals specified in subsection (a) (1). Such plans shall 
be developed and such arrangements shall be made after consultation 
with the Secretary of State, the Attorney General, and the Secretary 
of Defense. To the extent feasible, assistance provided under sub- 
section (a) shall be provided in accordance with the plans developed 
pursuant to this subsection, as modified from time to time by the 
Secretary. 

(c) For purposes of this section, the term "temporary assistance" 
means money payments, medical care, temporary billeting, transporta- 
tion, and other goods and services necessary for the health or welfare 
of individuals (including guidance, counseling, and other welfare 
services) furnished to them within the United States upon their ar- 
rival in the United States and for such period after their arrival, not 
exceeding ninety days, as may be provided in regulations of the Secre- 
tary ; except that assistance under this section may be furnished beyond 
such ninety-day period in the case of any citizen or dependent upon a 
finding by the Secretary that the circumstances involved necessitate or 
justify the furnishing of assistance beyond such period in that par- 
ticular case. 

(d) The total amount of temporary assistance provided under this 
section shall not exceed — 

(1) $8,000,000 during the fiscal years ending June 30, 1975, 
and June 30, 1976, and the succeeding calendar quarter, or 

(2) $300,000 during any fiscal year beginning on or after 
October 1, 1976. 1 

Appointment of Advisory Council and Other Advisory Groups 

Sec. 1114. (a) The Secretary shall, during 1964, appoint an Ad- 
visory Council on Public Welfare for the purpose of reviewing the 
administration of the public assistance and child welfare services pro- 
grams for which funds are appropriated pursuant to this Act and 
making recommendations for improvement of such administration, 
and reviewing the status of and making recommendations with respect 
to the public assistance programs for which funds are so appropriated, 
especially in relation to the old-age, survivors, and disability insur- 
ance program, with respect to the fiscal capacities of the States and 
the Federal Government, and with respect to any other matters bear- 



1 Section 1113 was amended by Pnhlic Law 94-44. 



311 



Sec. 1114(g) 



ing on the amount and proportion of the Federal and State shares in 
the public assistance and child welfare services programs. 

(b) The Council shall be appointed by the Secretary without regard 
to the provisions of title 5, United States Code, governing appoint- 
ments in the competitive service and shall consist of twelve persons 
who shall, to the extent possible, be representatives of employers and 
employees in equal numbers, representatives of State or Federal agen- 
cies concerned with the administration or financing of the public 
assistance and child welfare services programs, representatives of non- 
profit private organizations concerned with social welfare programs, 
other persons with special knowledge, experience, or qualifications 
with respect to such programs, and members of the public. 

(c) The Council is authorized to engage such technical assistance 
as may be required to carry out its functions, and the Secretary shall, 
in addition, make available to the Council such secretarial, clerical, 
and other assistance and such pertinent data prepared by the Depart- 
ment of Health, Education, and Welfare as it may require to carry 
out such functions. 

(d) The Council shall make a report of its findings and recom- 
mendations (including recommendations for changes in the provisions 
of the Social Security Act) to the Secretary, such report to be sub- 
mitted not later than July 1, 1966, after which date such Council 
shall cease to exist. 

(e) The Secretary shall also from time to time thereafter appoint an 
Advisory Council on Public Welfare, with the same functions and 
constituted in the same manner as prescribed for the Advisory Coun- 
cil in the preceding subsections of this section. Each Council so ap- 
pointed shall report its findings and recommendations, as prescribed 
in subsection (d), not later than July 1 of the second year after the 
year in which it is appointed, after which date such Council shall cease 
to exist. 

(f ) The Secretary may also appoint, without regard to the provi- 
sions of title 5, United States Code, governing appointments in the 
competitive service, such advisory committees as he may deem ad- 
visable to advise and consult with him in carrying out any of his func- 
tions under this Act. The Secretary shall report to the Congress an- 
nually on the number of such committees and on the membership and 
activities of each such committee. 

(g) Members of the Council or of any advisory committee appointed 
under this section who are not regular full-time employees of the 
United States shall, while serving on business of the Council or any 
such committee be entitled to receive compensation at rates fixed by 
the Secretary, but not exceeding $75 per day, including travel time; 
and while so serving away from their homes or regular places of busi- 
ness, they may be allowed travel expenses, including per diem in lieu 



Sec. 1114(g) 



312 



of subsistence, as authorized by section 5703 of title 5, United States 
Code for persons in Government service employed intermittently. 

(h) (1) Any member of the Council or any advisory committee 
appointed under this Act, who is not a regular full-time employee of 
the United States, is hereby exempted, with respect to such appoint- 
ment, from the operation of sections 281, 283, and 1914 of title 18 of 
the United States Code, and section 190 of the Revised Statutes (5 
U.S.C. 99), except as otherwise specified in paragraph (2) of this 
subsection. 

(2) The exemption granted by paragraph (1) shall not extend — 

(A) to the receipt or payment of salary in connection with 
the appointee's Government service from any source other than 
the employer of the appointee at the time of his appointment, or 

(B) during the period of such appointment, to the prosecu- 
tion or participation in the prosecution, by any person so ap- 
pointed, of any claim against the Government involving any 
matter with which such person, during such period, is or was 
directly connected by reason of such appointment. 

Demonstration Projects 

Sec. 1115. In the case of any experimental, pilot, or demonstration 
project which, in the judgment of the Secretary, is likely to assist in 
promoting the objectives of title I, VI, X, XIV, XVI, XIX, or XX, 
or part A of title IV, in a State or States — 

(a) the Secretary may waive compliance with any of the re- 
quirements of section 2, 402, 602, 1002, 1402, 1602, 1902, 2002, 2003, 
or 2004, as the case may be, to the extent and for the period he 
finds necessary to enable such State or States to carry out such 
project, and 

(b) costs of such project which would not otherwise be in- 
cluded as expenditures under section 3, 403, 603, 1003, 1403, 1603, 
1903, or 2002, as the case may be, and which are not included as 
part of the costs of projects under section 1110, shall, to the extent 
and for the period prescribed by the Secretary, be regarded as 
expenditures under the State plan or plans approved under such 
title, or for administration of such State plan or plans, or expendi- 
tures with respect to which payment shall be made under section 
2002, as may be appropriate. 

In addition, not to exceed $4,000,000 of the aggregate amount appro- 
priated for payments to States under such titles for any fiscal year 
beginning after June 30, 1967, shall be available, under such terms 
and conditions as the Secretary may establish, for payments to States 
to cover so much of the cost of such project as is not covered by pay- 
ments under such titles and is not included as part of the cost of 
projects for purposes of section 1110. 



313 



Sec. 1116(a) 



Administrative and Judicial Review of Certain Administrative 

Determinations 

Sec. 1116. (a) (1) Whenever a State plan is submitted to the Sec- 
retary by a State for approval under title I, VI, X, XIV, XVI, XIX, 
or XX, or part A of title IV, he shall not later than 90 days after the 
date the plan is submitted to him, make a determination as to whether 
it conforms to the requirements for approval under such title. The 90- 
day period provided herein may be extended by written agreement of 
the Secretary and the affected State. 

(2) Any State dissatisfied with a determination of the Secretary 
under paragraph (1) with respect to any plan may, within 60 days 
after it has been notified of such determination, file a petition with the 
Secretary for reconsideration of the issue of whether such plan con- 
forms to the requirements for approval under such title. Within 30 
days after receipt of such a petition, the Secretary shall notify the 
State of the time and place at which a hearing will be held for the 
purpose of reconsidering such issue. Such hearing shall be held not 
less than 20 days nor more than 60 days after the date notice of such 
hearing is furnished to such State, unless the Secretary and such 
State agree in writing to holding the hearing at another time. The 
Secretary shall affirm, modify, or reverse his original determination 
within 60 days of the conclusion of the hearing. 

(3) Any State which is dissatisfied with a final determination made 
by the Secretary on such a reconsideration or a final determination of 
the Secretary under section 4, 404, 604, 1004, 1404, 1604, 1904, or 2003 
may, within 60 days after it has been notified of such determination, file 
with the United States court of appeals for the circuit in which such 
State is located a petition for review of such determination. A copy of 
the petition shall be forthwith transmitted by the clerk of the court to 
the Secretary. The Secretary thereupon shall file in the court the rec- 
ord of the proceedings on which he based his determination as pro- 
vided in section 2112 of title 28, United States Code. 

(4) The findings of fact by the Secretary, if supported by substan- 
tial evidence, shall be conclusive ; but the court, for good cause shown, 
may remand the case to the Secretary to take further evidence, and the 
Secretary may thereupon make new or modified findings of fact and 
may modify his previous action, and shall certify to the court the tran- 
script and record of the further proceedings. Such new or modified 
findings of fact shall likewise be conclusive if supported by substantial 
evidence. 

(5) The court shall have jurisdiction to affirm the action of the 
Secretary or to set it aside, in whole or in part. The judgment of the 
court shall be subject to review by the Supreme Court of the United 
States upon certiorari or certification as provided in section 1254 of 
title 28, United States Code. 



Sec. 1116(b) 



314 



(b) For the purposes of subsection (a), any amendment of a State 
plan approved under title I, VI, X, XIV, XVI, XIX, or XX, or Part 
A of title IV, may, at the option of the State, be treated as the sub- 
mission of a new State plan. 

(c) Action pursuant to an initial determination of the Secretary 
described in subsection (a) shall not be stayed pending reconsidera- 
tion, but in the event that the Secretary subsequently determines that 
his initial determination was incorrect he shall certify restitution 
forthwith in a lump sum of any funds incorrectly withheld or other- 
wise denied. 

(d) Whenever the Secretary determines that any item or class of 
items on account of which Federal financial participation is claimed 
under title I, VI, X, XIV, XVI, XIX, XX, or part A of title IV, shall 
be disallowed for such participation, the State shall be entitled to and 
upon request shall receive a reconsideration of the disallowance. 

Sec. 1117. [Repealed.] 

Alternative Federal Payment With Respect to Public 

Assistance Expenditures 

Sec. 1118. In the case of any State which has in effect a plan ap- 
proved under title XIX for any calendar quarter, the total of the 
payments to which such State is entitled for such quarter, and for each 
succeeding quarter in the same fiscal year (which for purposes of this 
section means the 4 calendar quarters ending with June 30), under 
paragraphs (1) and (2) of sections 3(a), 403(a), 1003(a), 1403(a), 
and 1603(a) shall, at the option of the State, be determined by appli- 
cation of the Federal medical assistance percentage (as defined by sec- 
tion 1905), instead of the percentages provided under each such sec- 
tion, to the expenditures under its State plans approved under titles 
I, X, XIV, and XVI, and part A of title IV, which would be in- 
cluded in determining the amounts of the Federal payments to which 
such State is entitled under such sections, but without regard to any 
maximum on the dollar amounts per recipient which may be counted 
under such sections. 

Federal Participation in Payments for Repairs to Home Owned 

by Recipient of Aid or Assistance 

Sec. 1119. In the case of an expenditure for repairing the home 
owned by an individual who is receiving aid or assistance, other than 
medical assistance to the aged under a State plan approved under 
title I, X, XIV, or XVI, or part A of title IV if— 

(1) the State agency or local agency administering the plan 
approved under such title has made a finding (prior to making 
such expenditure) that (A) such home is so defective that con- 



315 



Sec. 1122(a) 



tinued occupancy is unwarranted, (B) unless repairs are made to 
such home, rental quarters will be necessary for such individual, 
and (C) the cost of rental quarters to take care of the needs of 
such individual (including his spouse living with him in such 
home and any other individual whose needs were taken into ac- 
count in determining the need of such individual) would exceed 
(over such time as the Secretary may specify) the cost of repairs 
needed to make such home habitable together with other costs 
attributable to continued occupancy of such home, and 

(2) no such expenditures were made for repairing such home 
pursuant to any prior finding under this section, 
the amount paid to any such State for any quarter under section 3(a) , 
403(a), 1003(a), 1403(a), or 1603(a) shall be increased by 50 per 
centum of such expenditures, except that the excess above $500 ex- 
pended with respect to any one home shall not be included in deter- 
mining such expenditures. 

Approval of Certain Projects 

Sec. 1120. (a) No payment shall be made under this Act with 
respect to any experimental, pilot, demonstration, or other project 
all or any part of which is wholly financed with Federal funds made 
available under this Act (without any State, local, or other non- 
Federal financial participation) unless such project shall have been 
personally approved by the Secretary or Under Secretary of Health, 
Education, and Welfare. 

(b) As soon as possible after the approval of any project under 
subsection (a), the Secretary shall submit to the Congress a descrip- 
tion of such project including a statement of its purpose, probable 
cost, and expected duration. 

Sec. 1121. [Repealed.] 

Limitation on Federal Participation for Capital Expenditures 1 

Sec. 1122. (a) The purpose of this section is to assure that Federal 
funds appropriated under title V, XVIII, and XIX are not used to 

*P.L. 92-603, sec. 221(a), added sec. 1122. Applicable only to a capital expenditure the 
obligation for which is incurred by or on behalf of a health care facility or health mainte- 
nance organization subsequent to whichever of the following is earlier: (A) December 31, 
1972, or (B) with respect to any State or any part thereof specified by such State, the last 
day of the calendar quarter in which the State requests that the amendment made by sub- 
section (a) of this section apply in such State or such part thereof. 

P.L. 92-603, sec. 221(d), provides: 

"In the case of a health care facility providing health care services as of December 18, 
1970, which on such date is committed to a formal plan of expansion or replacement, the 
amendments made by the preceding provisions of this section shall not apply with respect 
to such expenditures as may be made or obligations incurred for capital items included in 
such plan where preliminary expenditures toward the plan of expansion or replacement (in- 
cluding payments for studies, surveys, designs, plans, working drawings, specifications, 
and site acquisition, essential to the acquisition, improvement, expansion," or replacement 
of the health care facility or equipment concerned) of $100,000 or more, had been made 
during the three-year period ended December 17. 1970." 



Sec. 1122(b) 



316 



support unnecessary capital expenditures made by or on behalf of 
health care facilities or health maintenance organizations which are 
reimbursed under any of such titles and that, to the extent possible, 
reimbursement under such titles shall support planning activities with 
respect to health services and facilities in the various States. 

(b) The Secretary, after consultation with the Governor (or other 
chief executive officer) and with appropriate local public officials, shall 
make an agreement with any State which is able and willing to do 
so under which a designated planning agency (which shall be an 
agency described in clause (ii) of subsection (d)(1)(B) that has a 
governing body or advisory board at least half of whose members 
represent consumer interests) will — 

( 1 ) make, and submit to the Secretary together with such sup- 
porting materials as he may find necessary, findings and recom- 
mendations with respect to capital expenditures proposed by or 
on behalf of any health care facility or health maintenance 
organization in such State within the field of its responsibilities. 

(2) receive from other agencies described in clause (ii) of 
subsection (d) (1) (B), and submit to the Secretary together with 
such supporting material as he may find necessary, the findings 
and recommendations of such other agencies with respect to 
capital expenditures proposed by or on behalf of health care 
facilities or health maintenance organizations in such State within 
the fields of their respective responsibilities, and 

(3) establish and maintain procedures pursuant to which a 
person proposing any such capital expenditure may appeal a 
recommendation by the designated agency and will be granted 
an opportunity for a fair hearing by such agency or person other 
than the designated agency as the Governor (or other chief execu- 
tive officer) may designate to hold such hearings, 

whenever and to the extent that the findings of such designated agency 
or any such other agency indicate that any such expenditure is not 
consistent with the standards, criteria, or plans developed pursuant 
to the Public Health Service Act (or the Mental Retardation Facil- 
ities and Community Mental Health Centers Construction Act of 
1963) to meet the need for adequate health care facilities in the area 
covered by the plan or plans so developed. 

(c) The Secretary shall pay any such State from the Federal 
Hospital Insurance Trust Fund, in advance or by way of reimburse- 
ment as may be provided in the agreement with it (and may make 
adjustments in such payments on account of overpayments or under- 
payments previously made) , for the reasonable cost of performing the 
functions specified in subsection (b) . 

(d) (1) Except as provided in paragraph (2) , if the Secretary deter- 
mines that — 



317 



Sec. 1122(d) 



(A) neither the planning agency designated in the agreement 
described in subsection (b) nor an agency described in clause (ii) 
of subparagraph (B) of this paragraph had been given notice 
of any proposed capital expenditure (in accordance with such 
procedure or in such detail as may be required by such agency) 
at least 60 days prior to obligation for such expenditure ; or 

(B) (i) the planning agency so designated or an agency so 
described had received such timely notice of the intention to make 
such capital expenditure and had, within a reasonable period 
after receiving such notice and prior to obligation for such ex- 
penditure, notified the person proposing such expenditure that 
the expenditure would not be in conformity with the standards, 
criteria, or plans developed by such agency or any other agency 
described in clause (ii) for adequate health care facilities in such 
State or in the area for which such other agency has responsibility, 
and 

(ii) the planning agency so designated had, prior to submit- 
ting to the Secretary the findings referred to in subsection (b) — 

(I) consulted with, and taken into consideration the find- 
ings and recommendations of, the State planning agencies 
established pursuant to sections 314(a) and 604(a) of the 
Public Health Service Act (to the extent that either such 
agency is not the agency so designated) as well as the public 
or nonprofit private agency or organization responsible for 
the comprehensive regional, metropolitan area, or other local 
area plan or plans referred to in section 314(b) of the Public 
Health Service Act and covering the area in which the health 
care facility or health maintenance organization proposing 
such capital expenditure is located (where such agency is not 
the agency designated in the agreement) , or, if there is no 
such agency, such other public or nonprofit private agency 
or organization (if any) as performs, as determined in accord- 
ance with criteria included in regulations, similar functions, 
and 

(II) granted to the person proposing such capital expend- 
iture an opportunity for a fair hearing with respect to such 
findings ; 

then, for such period as he finds necessary in any case to effectuate the 
purpose of this section, he shall, in determining the Federal payments 
to be made under titles, V, XVIII, and XIX with respect to services 
furnished in the health care facility for which such capital expendi- 
ture is made, not include any amount which is attributable to deprecia- 
tion, interest on borrowed funds, a return on equity capital (in the case 
of proprietary facilities), or other expenses related to such capital 



Sec. 1122(e) 



318 



expenditure. With respect to any organization which is reimbursed 
on a per capita or a fixed fee or negotiated rate basis, in determining 
the Federal payments to be made under titles V, XVIII, and XIX, the 
Secretary shall exclude an amount which in his judgment is a reason- 
able equivalent to the amount which would otherwise be excluded under 
this subsection if payment were to be made on other than a per capita 
or a fixed fee or negotiated rate basis. 

(2) If the Secretary, after submitting the matters involved to the 
advisory council established or designated under subsection (i), de- 
termines that an exclusion of expenses related to any capital expendi- 
ture of any health care facility or health maintenance organization 
would discourage the operation or expansion of such facility or 
organization, or of any facility of such organization, which has 
demonstrated to his satisfaction proof of capability to provide compre- 
hensive health care services (including institutional services) effi- 
ciently, effectively, and economically, or would otherwise be incon- 
sistent with the effective organization and delivery of health services 
or the effective administration of title V, XVIII, or XIX, he shall 
not exclude such expenses pursuant to paragraph (1). 

(e) Where a person obtains under lease or comparable arrangement 
any facility or part thereof, or equipment for a facility, which would 
have been subject to an exclusion under subsection (d) if the person 
had acquired it by purchase, the Secretary shall (1) in computing 
such person's rental expense in determining the Federal payments 
to be made under titles V, XVIII, and XIX with respect to services 
furnished in such facility, deduct the amount which in his judgment 
is a reasonable equivalent of the amount that would have been excluded 
if the person had acquired such facility or such equipment by purchase, 
and (2) in computing such person's return on equity capital deduct 
any amount deposited under the terms of the lease or comparable 
arrangement. 

(f) Any person dissatisfied with a determination by the Secretary 
under this section may within six months following notification of such 
determination request the Secretary to reconsider such determination. 
A determination by the Secretary under this section shall not be 
subject to administrative or judicial review. 

(g) For the purposes of this section, a "capital expenditure" is an 
expenditure which, under generally accepted accounting principles, 

is not properly chargeable as an expense of operation and mainte- 
nance and which (1) exceeds $100,000, (2) changes the bed capacity of 
the facility with respect to which such expenditure is made, or (3) 
substantially changes the services of the facility with respect to which 
such expenditure is made. For purposes of clause (1) of the preceding 
sentence, the cost of the studies, surveys, designs, plans, working 
drawings, specifications, and other activities essential to the acquisi- 



319 



Sec. 1123(a) 



tion, improvement, expansion, or replacement of the plant and equip- 
ment with respect to which such expenditure is made shall be in- 
cluded in determining whether such expenditure exceeds $100,000. 

(h) The provisions of this section shall not apply to Christian 
Science sanatoriums operated, or listed and certified, by the First 
Church of Christ, Scientist, Boston, Massachusetts. 

(i) (l) The Secretary shall establish a national advisory council, 
or designate an appropriate existing national advisory council, to 
advise and assist him in the preparation of general regulations to carry 
out the purposes of this section and on policy matters arising in the 
administration of this section, including the coordination of activities 
under this section with those under other parts of this Act or under 
other Federal or federally assisted health programs. 

(2) The Secretary shall make appropriate provision for consulta- 
tion between and coordination of the work of the advisory council 
established or designated under paragraph (1) and the Federal Hos- 
pital Council, the National Advisory Health Council, the Health 
Insurance Benefits Advisory Council, and other appropriate national 
advisory councils with respect to matters bearing on the purposes and 
administration of this section and the coordination of activities under 
this section with related Federal health programs. 

(3) If an advisory council is established by the Secretary under 
paragraph (1) , it shall be composed of members who are not otherwise 
in the regular full-time employ of the United States, and who shall 
be appointed by the Secretary without regard to the civil service laws 
from among leaders in the fields of the fundamental sciences, the med- 
ical sciences, and the organization, delivery, and financing of health 
care, and persons who are State or local officials or are active in com- 
munity affairs or public or civic affairs or who are representative of 
minority groups. Members of such advisory council, while attending 
meetings of the council or otherwise serving on business of the council, 
shall be entitled to receive compensation at rates fixed by the Secretary, 
but not exceeding the maximum rate specified at the time of such serv- 
ice for grade GS-18 in section 5332 of title 5, United States Code, 
including traveltime, and while away from their homes or regular 
places of business they may also be allowed travel expenses, including 
per diem in lieu of subsistence, as authorized by section 5703 (b) of such 
title 5 for persons in the Government service employed intermittently. 

Program for Determining Qualifications for Certain Health Care 

Personnel 

Sec. 1123. (a) The Secretary, in carrying out his functions relat- 
ing to the qualifications for health care personnel under title XVIII, 
shall develop (in consultation with appropriate professional health 



Sec. 1123(b) 



320 



organizations and State health and licensure agencies) and conduct (in 
conjunction with State health and licensure agencies) until Decem- 
ber 31, 1977, a program designed to determine the proficiency of 
individuals (who do not otherwise meet the formal educational, 
professional membership, or other specific criteria established for 
determining the qualifications of practical nurses, therapists, labora- 
tory technicians, and technologists, and cytotechnologists, X-ray tech- 
nicians, psychiatric technicians, or other health care technicians and 
technologists) to perform the duties and functions of practical nurses, 
therapists, laboratory technicians, technologists, and cytotechnologists, 
X-ray technicians, psychiatric technicians, or other health care tech- 
nicians and technologists. Such program shall include (but not be 
limited to) the employment of procedures for the formal testing of the 
proficiency of individuals. In the conduct of such program, no indivi- 
dual who otherwise meets the proficiency requirements for any health 
care specialty shall be denied a satisfactory proficiency rating solely 
because of his failure to meet formal educational or professional mem- 
bership requirements. 

(b) If any individual has been determined, under the program 
established pursuant to subsection (a), to be qualified to perform the 
duties and functions of any health care specialty, no person or pro- 
vider utilizing the services of such individual to perform such duties 
and functions shall be denied payment, under title XVIII or under 
any State plan approved under title XIX, for any health care services 
provided by such person on the grounds that such individual is not 
qualified to perform such duties and functions. 

Sec. 1130. [Eepealed.] 

Notification of Social Security Claimant With Respect to Deferred 

Vested Benefits 

Sec. 1131. (a) Whenever — 

(1) the Secretary makes a finding of fact and a decision as to — 

(A) the entitlement of any individual to monthly benefits 
under section 202, 223, or 228, 

(B) the entitlement of any individual to a lump-sum 
death payment payable under section 202 (i) on account of 
the death of any person to whom such individual is related 
by blood, marriage, or adoption, or 

(C) the entitlement under section 226 of any individual 
to hospital insurance benefits under part A of title XVIII, or 

(2) the Secretary is requested to do so — 

(A) by any individual with respect to whom the Secre- 
tary holds information obtained under section 6057 of the 
Internal Revenue Code of 1954, or 



321 



Sec. 1151 



(B) in the case of the death of the individual referred 
to in subparagraph (A), by the individual who would be 
entitled to payment under section 204(d) of this Act, 
he shall transmit to the individual referred to in paragraph (1) 
or the individual making the request under paragraph (2) any 
information, as reported by the employer, regarding any deferred 
vested benefit transmitted to the Secretary pursuant to such sec- 
tion 6057 with respect to the individual referred to in paragraph 
(1) or (2) (A) or the person on whose wages and self -employment 
income entitlement (or claim of entitlement) is based. 
(b)(1) For purposes of section 201(g)(1), expenses incurred in 
the administration of subsection (a) shall be deemed to be expenses 
incurred for the administration of title II. 

(2) There are hereby authorized to be appropriated to the Federal 
Old- Age and Survivors Insurance Trust Fund for each fiscal year 
(commencing with the fiscal year ending June 30, 1974) such sums 
as the Secretary deems necessary on account of additional adminis- 
trative expenses resulting from the enactment of the provisions of sub- 
section (a). 

Part B — Professional Standards Review 

Declaration of Purpose 

Sec. 1151. In order to promote the effective, efficient, and economi- 
cal delivery of health care services of proper quality for which pay- 
ment may be made (in whole or in part) under this Act and in 
recognition of the interests of patients, the public, practitioners, and 
providers in improved health care services, it is the purpose of this 
part to assure, through the application of suitable procedures of pro- 
fessional standards review, that the services for which payment may 
be made under the Social Security Act will conform to appropriate 
professional standards for the provision of health care and that pay- 
ment for such services will be made — 

(1) only when, and to the extent, medically necessary, as 
determined in the exercise of reasonable limits of professional 
discretion; and 

(2) in the case of services provided by a hospital or other 
health care facility on an inpatient basis, only when and for such 
period as such services cannot, consistent with professionally 
recognized health care standards, effectively be provided on an 
outpatient basis or more economically in an inpatient health care 
facility of a different type, as determined in the exercise of rea- 
sonable limits of professional discretion. 



Sec. 1152(a) 



322 



Designation of Professional Standards Review Organizations 

Sec. 1152. (a) The Secretary shall (1) not later than January 1, 
1974, establish throughout the United States appropriate areas with 
respect to which Professional Standards Keview Organizations may 
be designated, and (2) at the earliest practicable date after designation 
of an area enter into an agreement with a qualified organization 
whereby such an organization shall be conditionally designated as 
the Professional Standards Review Organization for such area. If, on 
the basis of its performance during such period of conditional desig- 
nation, the Secretary determines that such organization is capable of 
fulfilling, in a satisfactory manner, the obligations and requirements 
for a Professional Standards Review Organization under this part, 
he shall enter into an agreement with such organization designating 
it as the Professional Standards Review Organization for such area. 

(b) For purposes of subsection (a), the term "qualified organiza- 
tion" means — 

(1) when used in connection with any area — 

(A) an organization (i) which is a nonprofit professional 
association (or a component organization thereof) , (ii) which 
is composed of licensed doctors of medicine or osteopathy 
engaged in the practice of medicine or surgery in such area, 
(iii) the membership of which includes a substantial propor- 
tion of all such physicians in such area, (iv) which is orga- 
nized in a manner which makes available professional com- 
petence to review health care services of the types and kinds 
with respect to which Professional Standards Review Orga- 
nizations have review responsibilities under this part, (v) the 
membership of which is voluntary and open to all doctors of 
medicine or osteopathy licensed to engage in the practice of 
medicine or surgery in such area without requirement of 
membership in or payment of dues to any organized medical 
society or association, and (vi) which does not restrict the 
eligibility of any member for service as an officer of the Pro- 
fessional Standards Review Organization or eligibility for 
and assignment to duties of such Professional Standards Re- 
view Organization, or, subject to subsection (c)(i), 

(B) such other public, nonprofit private, or other agency 
or organization, which the Secretary determines, in accord- 
ance with criteria prescribed by him in regulations, to be of 
professional competence and otherwise suitable ; and 

(2) an organization which the Secretary, on the basis of his 
examination and evaluation of a formal plan submitted to him by 
the association, agency, or organization (as well as on the basis 
of other relevant data and information), finds to be willing to 



323 



Sec. 1152(d) 



perform and capable of performing, in an effective, timely, and 
objective manner and at reasonable cost, the duties, functions, and 
activities of a Professional Standards Review Organization re- 
quired by or pursuant to this part. 

(c) (1) The Secretary shall not enter into any agreement under this 
part under which there is designated as the Professional Standards 
Review Organization for any area any organization other than an 
organization referred to in subsection (b)(1)(A) prior to January 
1, 1978, nor after such date, unless, in such area, there is no organiza- 
tion referred to in subsection (b) (1) (A) which meets the conditions 
specified in subsection (b) (2). 1 

(2) Whenever the Secretary shall have entered into an agreement 
under this part under which there is designated as the Professional 
Standards Review Organization for any area any organization other 
than an organization referred to in subsection (b)(1)(A), he shall not 
renew such agreements with such organization if he determines that — 

(A) there is in such area an organization referred to in sub- 
section (b)(1)(A) which (i) has not been previously designated 
as a Professional Standards Review Organization, and (ii) is 
willing to enter into an agreement under this part under which 
such organization would be designated as the Professional Stand- 
ards Review Organization for such area ; 

(B) such organization meets the conditions specified in sub- 
section (b) (2) ; and 

(C) the designation of such organization as the Professional 
Standards Review Organization for such area is anticipated to 
result in substantial improvement in the performance in such 
area of the duties and functions required of such organizations 
under this part. 

(d) Any such agreement under this part with an organization 
(other than an agreement established pursuant to section 1154) shall 
be for a term of 12 months; except that, prior to the expiration of 
such term such agreement may be terminated — 

(1) by the organization at such time and upon such notice 
to the Secretary as may be prescribed in regulations (except that 
notice of more than 3 months may not be required) ; or 

(2) by the Secretary at such time and upon such reasonable 
notice to the organization as may be prescribed in regulations, 
but only after the Secretary has determined (after providing 
such organization with an opportunity for a formal hearing on 
the matter) that such organization is not substantially complying 
with or effectively carrying out the provisions of such agreement. 



1 Date in subsection (c)(1) changed from "January 1, 1976" to "January 1, 1978" bv 
section 108(a) of Public Law 94-182 subject to limitations specified in. section 108(b) 
of the same act, which is reprinted in this document on page 741. 



Sec. 1152(e) 



324 



(e) In order to avoid duplication of functions and unnecessary 
review and control activities, the Secretary is authorized to waive any 
or all of the review, certification, or similar activities otherwise re- 
quired under or pursuant to any provision of this Act (other than 
this part) where he finds, on the basis of substantial evidence of the 
effective performance of review and control activities by Professional 
Standards Review Organizations, that the review, certification, and 
similar activities otherwise so required are not needed for the pro- 
vision of adequate review and control. 

(f) (1) In the case of agreements entered into prior to January 1, 
1978, under this part under which any organization is designated as 
the Professional Standards Review Organization for any area, the 
Secretary shall, prior to entering into any such agreement with any 
organization for any area, inform (under regulations of the Secretary) 
the doctors of medicine or osteopathy who are in active practice in 
such area of the Secretary's intention to enter into such an agreement 
with such organization. 1 

(2) If, within a reasonable period of time following the serving of 
such notice, more than 10 per centum of such doctors object to the 
Secretary's entering into such an agreement with such organization 
on the ground that such organization is not representative of doctors 
in such area, the Secretary shall conduct a poll of such doctors to deter- 
mine whether or not such organization is representative of such doctors 
in such area. If more than 50 per centum of the doctors responding to 
such poll indicate that such organization is not representative of such 
doctors in such area the Secretary shall not enter into such an agree- 
ment with such organization. 

(g) (1) In any case in which the Secretary has established, within 
a State, two or more appropriate areas with respect to which Profes- 
sional Standards Review Organizations may be designated, he shall, 
prior to designating a Professional Standards Review Organization 
for any such area, conduct in each such area a poll in which the doc- 
tors of medicine and doctors of osteopathy engaged in active practice 
therein will be asked : "Do you support a change from the present local 
and regional Professional Standards Review Organization area desig- 
nations to a single statewide area designation?". If, in each such area, 
more than 50 per centum of the doctors responding to such question 
respond in the affirmative, then the Secretary shall establish the entire 
State as a single Professional Standards Review Organization area. 

(2) The provisions of paragraph (1) shall not be applicable with 
respect to the designation of Professional Standards Review Orga- 
nization areas in any State, if, prior to the date of enactment of this 
subsection, the Secretary has entered into an agreement (on a condi- 



1 Date in subsection (f)(1) changed from "January 1, 1976" to "January 1, 1978" by 
section 108(a) of Public L-aw 94-182 subject to limitations specified in section 108(b) 
of the same act. which is reprinted in this document on page 741. 



325 



Sec. 1154(b) 



tional basis, or otherwise) with an organization designating it as the 
Professional Standards Review Organization for any area in the 
State. 1 

Review Pending Designation of Professional Standards Review 

Organization 

Sec. 1153. Pending the assumption by a Professional Standards 
Review Organization for any area, of full review responsibility, and 
pending a demonstration of capacity for improved review effort with 
respect to matters involving the provision of health care services in 
such area for which payment (in whole or in part) may be made, under 
this Act, any review with respect to such services which has not been 
designated by the Secretary as the full responsibility of such organiza- 
tion, shall be reviewed in the manner otherwise provided for under 
law. 

Trial Period for Professional Standards Review Organizations 

Sec. 1154. (a) The Secretary shall initially designate an organiza- 
tion as a Professional Standards Review Organization for any area 
on a conditional basis with a view to determining the capacity of such 
organization to perform the duties and functions imposed under this 
part on Professional Standards Review Organizations. Such designa- 
tion may not be made prior to receipt from such organization and 
approval by the Secretary of a formal plan for the orderly assump- 
tion and implementation of the responsibilities of the Professional 
Standards Review Organization under this part. 

(b) During any such trial period (which may not exceed 24 
months), the Secretary may require a Professional Standards Review 
Organization to perform only such of the duties and functions re- 
quired under this part of Professional Standards Review Organiza- 
tion as he determines such organization to be capable of performing. 
The number and type of such duties shall, during the trial period, be 
progressively increased as the organization becomes capable of added 
responsibility so that, by the end of such period, such organization 
shall be considered a qualified organization only if the Secretary finds 
that it is substantially carrying out in a satisfactory manner, the 
activities and functions required of Professional Standards Review 
Organizations under this part with respect to the review of health 
care services provided or ordered by physicians and other practition- 
ers and institutional and other health care facilities, agencies, and or- 
ganizations. Any of such duties and functions not performed by such 
organization during such period shall be performed in the manner and 
to the extent otherwise provided for under law. 



1 Subsection (g) was added by section 105 of Public Law 94-182. 



Sec. 1154(c) 



326 



(c) Any agreement under which any organization is conditionally 
designated as the Professional Standards Review Organization for 
any area may be terminated by such organization upon 90 days notice 
to the Secretary or by the Secretary upon 90 days notice to such 
organization. 

Duties and Functions of Professional Standards Review 

Organizations 

Sec. 1155. (a) (1) Notwithstanding any other provision of law, but 
consistent with the provisions of this part, it shall (subject to the pro- 
visions of subsection (g) ) be the duty and function of each Profes- 
sional Standards Review Organization for any area to assume, at the 
earliest date practicable, responsibility for the review of the profes- 
sional activities in such area of physicians and other health care prac- 
titioners and institutional and noninstitutional providers of health 
care services in the provision of health care services and items for 
which payment may be made (in whole or in part) under this Act for 
the purpose of determining whether — 

(A) such services and items are or were medically necessary; 

(B) the quality of such services meets professionally recog- 
nized standards of health care ; and 

(C) in case such services and items are proposed to be pro- 
vided in a hospital or other health care facility on an inpatient 
basis, such services and items could, consistent with the provision 
of appropriate medical care, be effectively provided on an out- 
patient basis or more economically in an inpatient health care 
facility of a different type. 

(2) Each Professional Standards Review Organization shall have 
the authority to determine, in advance, in the case of — 

(A) any elective admission to a hospital, or other health care 
facility, or 

(B) any other health care service which will consist of 
extended or costly courses of treatment, 

whether such service, if provided, or if provided by a particular health 
care practitioner or by a particular hospital or other health care 
facility, organization, or agency, would meet the criteria specified in 
clauses (A) and (C) of paragraph (1). 

(3) Each Professional Standards Review Organization shall, in 
accordance with regulations of the Secretary, determine and publish, 
from time to time, the types and kinds of cases (whether by type of 
health care or diagnosis involved, or whether in terms of other rele- 
vant criteria relating to the provision of health care services) with 
respect to which such organization will, in order most effectively to 
carry out the purposes of this part, exercise the authority conferred 
upon it under paragraph (2) . 



327 



Sec. 1155(b) 



(4) Each Professional Standards Review Organization shall be 
responsible for the arranging for the maintenance of and the regular 
review of profiles of care and services received and provided with 
respect to patients, utilizing to the greatest extent practicable in such 
patient profiles, methods of coding which will provide maximum con- 
fidentiality as to patient identity and assure objective evaluation con- 
sistent with the purposes of this part. Profiles shall also be regularly 
reviewed on an ongoing basis with respect to each health care prac- 
titioner and provider to determine whether the care and services 
ordered or rendered are consistent with the criteria specified in clauses 
(A), (B),and (C) of paragraph (1). 

(5) Physicians assigned responsibility for the review of hospital 
care may be only those having active hospital staff privileges in at 
least one of the participating hospitals in the area served by the Pro- 
fessional Standards Review Organization and (except as may be other- 
wise provided under subsection (e) (1) of this section) such physicians 
ordinarily should not be responsible for, but may participate in the 
review of care and services provided in any hospital in which such 
physicians have active staff privileges. 

(6) No physician shall be permitted to review — 

(A) health care services provided to a patient if he was di- 
rectly or indirectly involved in providing such services, or 

(B) health care services provided in or by an institution, or- 
ganization, or agency, if he or any member of his family has, 
directly or indirectly, any financial interest in such institution, 
organization, or agency. 

For purposes of this paragraph, a physician's family includes only his 
spouse (other than a spouse who is legally separated from him under 
a decree of divorce or separate maintenance), children (including 
legally adopted children) , grandchildren, parents, and grandparents. 

(b) To the extent necessary or appropriate for the proper perform- 
ance of its duties and functions, the Professional Standards Review 
Organization serving any area is authorized in accordance with regu- 
lations prescribed by the Secretary to — 

(1) make arrangements to utilize the services of persons who 
are practitioners of or specialists in the various areas of medicine 
(including dentistry) , or other types of health care, which persons 
shall, to the maximum extent practicable, be individuals engaged 
in the practice of their profession within the area served by such 
organization ; 

(2) undertake such professional inquiry either before or after, 
or both before and after, the provision of services with respect to 
which such organization has a responsibility for review under 
subsection (a) (1) ; 



Sec. 1155(c) 



328 



(3) examine the pertinent records of any practitioner or pro- 
vider of health care services providing services with respect to 
which such organization has a responsibility for review under 
subsection (a) (1) ; and 

(4) inspect the facilities in which care is rendered or services 
provided (which are located in such area) of any practitioner or 
provider. 

(c) No Professional Standards Review Organization shall utilize 
the services of any individual who is not a duly licensed doctor of 
medicine or osteopathy to make final determinations in accordance 
with its duties and functions under this part with respect to the pro- 
fessional conduct of any other duly licensed doctor of medicine or 
osteopathy, or any act performed by any duly licensed doctor of 
medicine or osteopathy in the exercise of his profession. 

(d) In order to familiarize physicians with the review functions 
and activities of Professional Standards Review Organizations and to 
promote acceptance of such functions and activities by physicians, 
patients, and other persons, each Professional Standards Review 
Organization, in carrying out its review responsibilities, shall (to 
the maximum extent consistent with the effective and timely perform- 
ance of its duties and functions) — 

(1) encourage all physicians practicing their profession in the 
area served by such Organization to participate as reviewers in 
the review activities of such Organizations ; 

(2) provide rotating physician membership of review com- 
mittees on an extensive and continuing basis ; 

(3) assure that membership on review committees have the 
broadest representation feasible in terms of the various types of 
practice in which physicians engage in the area served by such 
Organization; and 

(4) utilize, whenever appropriate, medical periodicals and sim- 
ilar publications to publicize the functions and activities of Pro- 
fessional Standards Review Organizations. 

(e) (1) Each Professional Standards Review Organization shall 
utilize the services of, and accept the findings of, the review com- 
mittees of a hospital or other operating health care facility or orga- 
nization located in the area served by such organization, but only when 
and only to the extent and only for such time that such committees in 
such hospital or other operating health care facility or organization 
have demonstrated to the satisfaction of such organization their ca- 
pacity effectively and in timely fashion to review activities in such 
hospital or other operating health care facility or organization (in- 
cluding the medical necessity of admissions, types and extent of 
services ordered, and lengths of stay) so as to aid in accomplishing 



329 



Sec. 1156(a) 



the purposes and responsibilities described in subsection (a) (1) , except 
where the Secretary disapproves, for good cause, such acceptance. 

(2) The Secretary may prescribe regulations to carry out the pro- 
visions of this subsection. 

(f ) (1) An agreement entered into under this part between the 
Secretary and any organization under which such organization is 
designated as the Professional Standards Keview Organization for 
any area shall provide that such organization will — 

(A) perform such duties and functions and assume such re- 
sponsibilities and comply with such other requirements as may 
be required by this part or under regulations of the Secretary pro- 
mulgated to carry out the provisions of this part ; and 

(B) collect such data relevant to its functions and such infor- 
mation and keep and maintain such records in such form as 
the Secretary may require to carry out the purposes of this part 
and to permit access to and use of any such records as the Secre- 
tary may require for such purposes. 

(2) Any such agreement with an organization under this part shall 
provide that the Secretary make payments to such organization equal 
to the amount of expenses reasonably and necessarily incurred, as 
determined by the Secretary, by such organization in carrying out or 
preparing to carry out the duties and functions required by such 
agreement. 

(g) Notwithstanding any other provision of this part, the respon- 
sibility for review of health care services of any Professional Stand- 
ards Review Organization shall be the review of health care serv- 
ices provided by or in institutions, unless such Organization shall 
have made a request to the Secretary that it be charged with the duty 
and function of reviewing other health care services and the Secretary 
shall have approved such request. 

Norms of Health Care Services for Various Illnesses or Health 

Conditions 

Sec. 1156. (a) Each Professional Standards Review Organization 
shall apply professionally developed norms of care, diagnosis, and 
treatment based upon typical patterns of practice in its regions (in- 
cluding typical lengths-of-stay for institutional care by age and dr, g- 
nosis) as principal points of evaluation and review. The National 
Professional Standards Review Council and the Secretary shall pro- 
vide such technical assistance to the organization as will be helpful 
in utilizing and applying such norms of care, diagnosis, and treatment. 
Where the actual norms of care, diagnosis, and treatment in a Profes- 
sional Standards Review Organization area are significantly different 
from professionally developed regional norms of care, diagnosis, and 
treatment approved for comparable conditions, the Professional 



64-310 O - 76 - 22 



Sec. 1156(b) 



330 



Standards Review Organization concerned shall be so informed, and 
in the event that appropriate consultation and discussion indicate 
reasonable basis for usage of other norms in the area concerned, the 
Professional Standards Review Organization may apply such norms 
in such area as are approved by the National Professional Standards 
Review Council. 

(b) Such norms with respect to treatment for particular illnesses 
or health conditions shall include (in accordance with regulations of 
the Secretary ) — 

(1) the types and extent of the health care services which, 
taking into account differing, but acceptable, modes of treatment 
and methods of organizing and delivering care are considered 
within the range of appropriate diagnosis and treatment of such 
illness or health condition, consistent with professionally recog- 
nized and accepted patterns of care ; 

(2) the type of health care facility which is considered, con- 
sistent with such standards, to be the type in which health care 
services which are medically appropriate for such illness or condi- 
tion can most economically be provided. 

(c) (1) The National Professional Standards Review Council shall 
provide for the preparation and distribution, to each Professional 
Standards Review Organization and to each other agency or person 
performing review functions with respect to the provision of health 
care services under this Act, of appropriate materials indicating the 
regional norms to be utilized pursuant to this part. Such data concern- 
ing norms shall be reviewed and revised from time to time. The 
approval of the National Professional Standards Review Council of 
norms of care, diagnosis, and treatment shall be based on its analysis 
of appropriate and adequate data. 

(2) Each review organization, agency, or person referred to in 
paragraph (1) shall utilize the norms developed under this section as 
a principal point of evaluation and review for determining, with re- 
spect to any health care services which have been or are proposed to be 
provided, whether such care and services are consistent with the cri- 
teria specified in section 1155(a) (1). 

(d) (1) Each Professional Standards Review Organization shall — 

(A) in accordance with regulations of the Secretary, specify 
the appropriate points in time after the admission of a patient for 
inpatient care in a health care institution, at which the physician 
attending such patient shall execute a certification stating that 
further inpatient care in such institution will be medically neces- 
sary effectively to meet the health care needs of such patient ; and 

(B) require that there be included in any such certification 
with respect to any patient such information as may be necessary 
to enable such organization properly to evaluate the medical 



331 



Sec. 1158(a) 



necessity of the further institutional health care recommended by 

the physician executing such certification. 
(2) The points in time at which any such certification will be 
required (usually, not later than the 50th percentile of lengths-of-stay 
for patients in similar age groups with similar diagnosis) shall be 
consistent with and based on professionally developed norms of care 
and treatment and data developed with respect to length of stay in 
health care institutions of patients having various illnesses, injuries, 
or health conditions, and requiring various types of health care serv- 
ices or procedures. 

Submission of Reports by Professional Standards Review 

Organizations 

Sec. 1157. If, in discharging its duties and functions under this 
part, any Professional Standards Review Organization determines 
that any health care practitioner or any hospital, or other health care 
facility, agency, or organization has violated any of the obligations 
imposed by section 1160, such organization shall report the matter to 
the Statewide Professional Standards Review Council for the State in 
which such organization is located together with the recommendations 
of such Organization as to the action which should be taken with 
respect to the matter. Any Statewide Professional Standards Review 
Council receiving any such report and recommendation shall review 
the same and promptly transmit such report and recommendation to 
the Secretary together with any additional comments or recommenda- 
tions thereon as it deems appropriate. The Secretary may utilize a 
Professional Standards Review Organization, in lieu of a program 
review team as specified in sections 1862 and 1866, for purposes of sub- 
paragraph (C) of section 1862(d) (1) and subparagraph (F) of sec- 
tion 1866(b) (2). 

Requirement of Review Approval as Condition of Payment of 

Claims 

Sec. 1158. (a) Except as provided for in section 1159, no Federal 
funds appropriated under any title of this Act (other than title V) 
for the provision of health care services or items shall be used (directly 
or indirectly) for the payment, under such title or any program estab- 
lished pursuant thereto, of any claim for the provision of such serv- 
ices or items, unless the Secretary, pursuant to regulation determines 
that the claimant is without fault if — 

(1) the provision of such services or items is subject to review 
under this part by any Professional Standards Review Organiza- 
tion, or other agency ; and 



Sec. 1158(b) 



332 



(2) such organization or other agency has, in the proper exer- 
cise of its duties and functions under or consistent with the pur- 
poses of this part, disapproved of the services or items giving 
rise to such claim, and has notified the practitioner or provider 
who provided or proposed to provide such services or items and 
the individual who would receive or was proposed to receive such 
services or items of its disapproval of the provision of such serv- 
ices or items. 

(b) Whenever any Professional Standards Review Organization, 
in the discharge of its duties and functions as specified by or pursuant 
to this part, disapproves of any health care services or items furnished 
or to be furnished by any practitioner or provider, such organiza- 
tion shall, after notifying the practitioner, provider, or other organi- 
zation or agency of its disapproval in accordance with subsection (a), 
promptly notify the agency or organization having responsibility for 
acting upon claims for payment for or on account of such services or 
items. 

Hearings and Review by Secretary 

Sec. 1159. (a) Any beneficiary or recipient who is entitled to ben- 
efits under this Act (other than title V) or a provider or practitioner 
who is dissatisfied with a determination with respect to a claim made 
by a Professional Standards Review Organization in carrying out its 
responsibilities for the review of professional activities in accordance 
with paragraphs (1) and (2) of section 1155(a) shall, after being 
notified of such determination, be entitled to a reconsideration thereof 
by the Professional Standards Review Organization and, where the 
Professional Standards Review Organization reaffirms such deter- 
mination in a State which has established a Statewide Professional 
Standards Review Council, and where the matter in controversy is 
$100 or more, such determination shall be reviewed by professional 
members of such Council and, if the Council so determines, revised. 

(b) Where the determination of the Statewide Professional Stand- 
ards Review Council is adverse to the beneficiary or recipient (or, in 
the absence of such Council in a State and where the matter in con- 
troversy is $100 or more) , such beneficiary or recipient shall be entitled 
to a hearing thereon by the Secretary to the same extent as is provided 
in section 205(b), and, where the amount in controversy is $1,000 or 
more, to judicial review of the Secretary's final decision after such 
hearing as is provided in section 205(g). The Secretary will render a 
decision only after appropriate professional consultation on the 
matter. 

(c) Any review or appeals provided under this section shall be in 
lieu of any review, hearing, or appeal under this Act with respect to 
the same issue. 



333 



Sec. 1160(a) 



Obligations of Health Care Practitioners and Providers of Health 
Care Services; Sanctions and Penalties; Hearings and Review 

Sec. 1160. (a) (1) It shall be the obligation of any health care 
practitioner and any other person (including a hospital or other 
health care facility, organization, or agency) who provides health 
care services for which payment may be made (in whole or in part) 
under this Act, to assure that services or items ordered or provided by 
such practitioner or person to beneficiaries and recipients under this 
Act— 

(A) will be provided only when, and to the extent, medically 
necessary; and 

(B) will be of a quality which meets professionally recognized 
standards of health care ; and 

(C) will be supported by evidence of such medical necessity 
and quality in such form and fashion and at such time as may 
reasonably be required by the Professional Standards Review 
Organization in the exercise of its duties and responsibilities; 

and it shall be the obligation of any health care practitioner in order- 
ing, authorizing, directing, or arranging for the provision by any 
other person (including a hospital or other health care facility, organi- 
zation, or agency) , of health care services for any patient of such prac- 
titioner, to exercise his professional responsibility with a view to 
assuring (to the extent of his influence or control over such patient, 
such person, or the provision of such services) that such services or 
items will be provided — 

(D) only when, and to the extent, medically necessary; and 

(E) will be of a quality which meets professionally recognized 
standards of health care. 

(2) Each health care practitioner, and each hospital or other pro- 
vider of health care services, shall have an obligation, within reason- 
able limits of professional discretion, not to take any action, in the 
exercise of his profession (in the case of any health care practitioner) , 
or in the conduct of its business (in the case of any hospital or other 
such provider) , which would authorize any individual to be admitted 
as an inpatient in or to continue as an inpatient in any hospital or other 
health care facility unless — 

(A) inpatient care is determined by such practitioner and by 
such hospital or other provider, consistent with professionally 
recognized health care standards, to be medically necessary for 
the proper care of such individual ; and 

(B) (i) the inpatient care required by such individual can- 
not, consistent with such standards, be provided more economi- 
cally in a health care facility of a different type ; or 

(ii) (in the case of a patient who requires care which can, 
consistent with such standards, be provided more economically 



Sec. 1160(b) 



334 



in a health care facility of a different type) there is, in the area 
in which such individual is located, no such facility or no such 
facility which is available to provide care to such individual at 
the time when care is needed by him. 
(b) (1) If after reasonable notice and opportunity for discussion 
with the practitioner or provider concerned, any Professional Stand- 
ards Review Organization submits a report and recommendations to 
the Secretary pursuant to section 1157 (which report and recom- 
mendations shall be submitted through the Statewide Professional 
Standards Review Council, if such Council has been established, which 
shall promptly transmit such report and recommendations together 
with any additional comments and recommendations thereon as it 
deems appropriate) and if the Secretary determines that such prac- 
titioner or provider, in providing health care services over which such 
organization has review responsibility and for which payment (in 
whole or in part) may be made under this Act has — 

(A) by failing, in a substantial number of cases, substantially 
to comply with any obligation imposed on him under subsection 

L (a), or ^ ^ V • >^i:^^Lj^ 

(B) by grossly and flagrantly violating any such obligation 

in one or more instances, 
demonstrated an unwillingness or a lack of ability substantially to 
comply with such obligations, he (in addition to any other sanction 
provided under law) may exclude (permanently for such period as 
the Secretary may prescribe) such practitioner or provider from eli- 
gibility to provide such services on a reimbursable basis. 

(2) A determination made by the Secretary under this subsection 
shall be effective at such time and upon such reasonable notice to the 
public and to the person furnishing the services involved as may be 
specified in regulations. Such determination shall be effective with 
respect to services furnished to an individual on or after the effective 
date of such determination (except that in the case of institutional 
health care services such determination shall be effective in the manner 
provided in title XVIII with respect to terminations of provider 
agreements), and shall remain in effect until the Secretary finds and 
gives reasonable notice to the public that the basis for such determina- 
tion has been removed and that there is reasonable assurance that it 
will not recur. 

(3) In lieu of the sanction authorized by paragraph (1), the Secre- 
tary may require that (as a condition to the continued eligibility of 
such practitioner or provider to provide such health care services on 
a reimbursable basis) such practitioner or provider pay to the United 
States, in case such acts or conduct involved the provision or ordering 
by such practitioner or provider of health care services which were 
medically improper or unnecessary, an amount not in excess of the 



335 



Sec. 1162(b) 



actual or estimated cost of the medically improper or unnecessary serv- 
ices so provided, or (if less) $5,000. Such amount may be deducted 
from any sums owing by the United States (or any instrumentality 
thereof) to the person from whom such amount is claimed. 

(4) Any person furnishing services described in paragraph (1) 
who is dissatisfied with a determination made by the Secretary under 
this subsection shall be entitled to reasonable notice and opportunity 
for a hearing thereon by the Secretary to the same extent as is pro- 
vided in section 205(b), and to judicial review of the Secretary's final 
decision after such hearing as is provided in section 205(g). 

(c) It shall be the duty of each Professional Standards Review 
Organization and each Statewide Professional Standards Review 
Council to use such authority or influence it may possess as a profes- 
sional organization, and to enlist the support of any other professional 
or governmental organization having influence or authority over 
health care practitioners and any other person (including a hospital 
or other health care facility, organization, or agency) providing health 
care services in the area served by such review organization, in assur- 
ing that each practitioner or provider (referred to in subsection (a) ) 
providing health care services in such area shall comply with all obli- 
gations imposed on him under subsection (a) . 

Notice to Practitioner or Provider 

Sec. 1161. Whenever any Professional Standards Review Organi- 
zation takes any action or makes any determination — 

(a) which denies any request, by a health care practitioner or 
other provider of health care services, for approval of a health 
care service or item proposed to be ordered or provided by such 
practitioner or provider; or 

(b) that any such practitioner or provider has violated any 
obligation imposed on such practitioner or provider under section 
1160, 

such organization shall, immediately after taking such action or mak- 
ing such determination, give notice to such practitioner or provider of 
such determination and the basis therefor, and shall provide him with 
appropriate opportunity for discussion and review of the matter. 

Statewide Professional Standards Review Councils; Advisory 

Groups to Such Councils 

Sec. 1162. (a) In any State in which there are located three or more 
Professional Standards Review Organizations, the Secretary shall 
establish a Statewide Professional Standards Review Council. 

(b) The membership of any such Council for any State shall be 
appointed by the Secretary and shall consist of — 



Sec. 1162(c) 



336 



(1) one representative from and designated by each Profes- 
sional Standards Review Organization in the State ; 

(2) four physicians, two of whom may be designated by the 
State medical society and two of whom may be designated by the 
State hospital association of such State to serve as members on 
such Council ; and 

(3) four persons knowledgeable in health care from such State 
whom the Secretary shall have selected as representatives of the 
public in such State (at least two of whom shall have been recom- 
mended for membership on the Council by the Governor of such 
State) . 

(c) It shall be the duty and function of the Statewide Professional 
Standards Review Council for any State, in accordance with regula- 
tions of the Secretary, (1) to coordinate the activities of, and dissemi- 
nate information and data among the various Professional Standards 
Review Organizations within such State including assisting the Secre- 
tary in development of uniform data gathering procedures and operat- 
ing procedures applicable to the several areas in a State (including, 
where appropriate, common data processing operations serving several 
or all areas) to assure efficient operation and objective evaluation of 
comparative performance of the several areas and, (2) to assist the 
Secretary in evaluating the performance of each Professional Stand- 
ards Review Organization, and (3) where the Secretary finds it neces- 
sary to replace a Professional Standards Review Organization, to 
assist him in developing and arranging for a qualified replacement 
Professional Standards Review Organization. 

(d) The Secretary is authorized to enter into an agreement with 
any such Council under which the Secretary shall make payments to 
such Council equal to the amount of expenses reasonably and neces- 
sarily incurred, as determined by the Secretary, by such Council in 
carrying out the duties and functions provided in this section. 

(e) (1) The Statewide Professional Standards Review Council for 
any State (or in a State which does not have such Council, the Profes- 
sional Standards Review Organizations in such State which have 
agreements with the Secretary) shall be advised and assisted in carry- 
ing out its functions by an advisory group (of not less than seven nor 
more than eleven members) which shall be made up of representatives 
of health care practitioners (other than physicians) and hospitals and 
other health care facilities which provide within the State health care 
services for which payment (in whole or in part) may be made under 
any program established by or pursuant to this Act. 

(2) The Secretary shall by regulations provide the manner in which 
members of such advisory group shall be selected by the Statewide 
Professional Standards Review Council (or Professional Standards 
Review Organizations in States without such Councils) . 



337 



Sec. 1163(e) 



(3) The expenses reasonably and necessarily incurred, as deter- 
mined by the Secretary, by such group in carrying out its duties and 
functions under this subsection shall be considered to be expenses nec- 
essarily incurred by the Statewide Professional Standards Review 
Council served by such group. 

National Professional Standards Review Council 

Sec. 1163. (a) (1) There shall be established a National Professional 
Standards Review Council (hereinafter in this section referred to 
as the "Council") which shall consist of eleven physicians, not other- 
wise in the employ of the United States, appointed by the Secretary 
without regard to the provisions of title 5, United States Code, govern- 
ing appointments in the competitive service. 

(2) Members of the Council shall be appointed for a term of three 
years and shall be eligible for reappointment. 

(3) The Secretary shall from time to time designate one of the 
members of the Council to serve as Chairman thereof. 

(b) Members of the Council shall consist of physicians of recog- 
nized standing and distinction in the appraisal of medical practice. 
A majority of such members shall be physicians who have been recom- 
mended by the Secretary to serve on the Council by national orga- 
nizations recognized by the Secretary as representing practicing 
physicians. The membership of the Council shall include physicians 
who have been recommended for membership on the Council by con- 
sumer groups and other health care interests. 

(c) The Council is authorized to utilize, and the Secretary shall make 
available, or arrange for, such technical and professional consulta- 
tive assistance as may be required to carry out its functions, and the 
Secretary shall, in addition, make available to the Council such secre- 
tarial, clerical and other assistance and such pertinent data prepared 
by, for, or otherwise available to, the Department of Health, Educa- 
tion, and Welfare as the Council may require to carry out its functions. 

(d) Members of the Council, while serving on business of the Coun- 
cil, shall be entitled to receive compensation at a rate fixed by the 
Secretary (but not in excess of the daily rate paid under GS-18 of 
the General Schedule under section 5332 of title 5, United States 
Code), including travel time; and while so serving away from their 
homes or regular places of business, they may be allowed travel ex- 
penses, including per diem in lieu of subsistence, as authorized by 
section 5703 of title 5, United States Code, for persons in Government 
service employed intermittently. 

(e) It shall be the duty of the Council to — 

(1) advise the Secretary in the administration of this part; 



Sec. 1163(f) 



338 



(2) provide for the development and distribution, among 
Statewide Professional Standards Review Councils and Profes- 
sional Standards Review Organizations of information and data 
which will assist such review councils and organizations in carry- 
ing out their duties and functions ; 

(3) review the operations of Statewide Professional Standards 
Review Councils and Professional Standards Review Organiza- 
tions with a view to determining the effectiveness and compara- 
tive performance of such review councils and organizations in 
carrying out the purposes of this part ; and 

(4) make or arrange for the making of studies and investiga- 
tions with a view to developing and recommending to the Secre- 
tary and to the Congress measures designed more effectively to 
accomplish the purposes and objectives of this part. 

(f) The National Professional Standards Review Council shall 
from time to time, but not less often than annually, submit to the 
Secretary and to the Congress a report on its activities and shall in- 
clude in such report the findings of its studies and investigations 
together with any recommendations it may have with respect to the 
more effective accomplishment of the purposes and objectives of this 
part. Such report shall also contain comparative data indicating the 
results of review activities, conducted pursuant to this part, in each 
State and in each of the various areas thereof. 

Application of This Part to Certain State Programs Receiving 

Federal Financial Assistance 

Sec. 1164. (a) In addition to the requirements imposed by law as a 
condition of approval of a State plan approved under any title of 
this Act under which health care services are paid for in whole or 
part, with Federal funds, there is hereby imposed the requirement 
that provisions of this part shall apply to the operation of such plan 
or program. 

(b) The requirement imposed by subsection (a) with respect to 
such State plans approved under this Act shall apply — 

(1) in the case of any such plan where legislative action by 
the State legislature is not necessary to meet such requirement, on 
and after January 1, 1974; and 

(2) in the case of any such plan where legislative action by the 
State legislature is necessary to meet such requirement, which- 
ever of the following is earlier — 

(A) on and after July 1, 1974, or 

(B) on and after the first day of the calendar month which 
first commences more than ninety days after the close of the 
first regular session of the legislature of such State which 
begins after December 31, 1973. 



339 



Sec. 1167(a) 



Correlation of Functions Between Professional Standards Re- 
view Organizations and Administrative Instrumentalities 

Sec. 1165. The Secretary shall by regulations provide for such cor- 
relation of activities, such interchange of data and information, and 
such other cooperation consistent with economical, efficient, coordi- 
nated, and comprehensive implementation of this part (including, but 
not limited to, usage of existing mechanical and other data-gathering 
capacity) between and among — 

(a) (1) agencies and organizations which are parties to agree- 
ments entered into pursuant to section 1816, (2) carriers which 
are parties to contracts entered into pursuant to section 1842, 
and (3) any other public or private agency (other than a Profes- 
sional Standards Review Organization) having review or con- 
trol functions, or proved relevant data-gathering procedures and 
experience, and 

(b) Professional Standards Review Organizations, as may be 
necessary or appropriate for the effective administration of title 
XVIII, or State plans approved under this Act. 

Prohibition Against Disclosure of Information 

Sec. 1166. (a) Any data or information acquired by any Profes- 
sional Standards Review Organization, in the exercise of its duties 
and functions, shall be held in confidence and shall not be disclosed 
to any person except (1) to the extent that may be necessary to carry 
out the purposes of this part or (2) in such cases and under such cir- 
cumstances as the Secretary shall by regulations provide to assure 
adequate protection of the rights and interests of patients, health 
care practitioners, or providers of health care. 

(b) It shall be unlawful for any person to disclose any such infor- 
mation other than for such purposes, and any person violating the 
provisions of this section shall, upon conviction, be fined not more 
than $1,000, and imprisoned for not more than six months, or both, 
together with the costs of prosecution. 

Limitation on Liability for Persons Providing Information, and 
for Members and Employees of Professional Standards Review 
Organizations, and for Health Care Practitioners and Providers 

Sec. 1167. (a) Notwithstanding any other provision of law, no 
person providing information to any Professional Standards Review 
Organization shall be held, by reason of having provided such informa- 
tion, to have violated any criminal law, or to be civilly liable under 



Sec. 1167(b) 



340 



any law, of the United States or of any State (or political subdivision 
thereof) unless — 

(1) such information is unrelated to the performance of the 
duties and functions of such Organization, or 

(2) such information is false and the person providing such 
information knew, or had reason to believe, that such information 
was false. 

(b) (1) No individual who, as a member or employee of any Pro- 
fessional Standards Review Organization or who furnishes profes- 
sional counsel or services to such organization, shall be held by reason 
of the performance by him of any duty, function, or activity authorized 
or required of Professional Standards Review Organizations under 
this part, to have violated any criminal law, or to be civilly liable 
under any law, of the United States or of any State (or political sub- 
division thereof) provided he has exercised due care. 

(2) The provisions of paragraph (1) shall not apply with respect 
to any action taken by any individual if such individual, in taking 
such action, was motivated by malice toward any person affected by 
such action. 

(c) No doctor of medicine or osteopathy and no provider (includ- 
ing directors, trustees, employees, or officials thereof) of health care 
services shall be civilly liable to any person under any law of the 
United States or of any State (or political subdivision thereof) on 
account of any action taken by him in compliance with or reliance 
upon professionally developed norms of care and treatment applied 
by a Professional Standards Review Organization (which has been 
designated in accordance with section 1152(b) (1) (A)) operating in 
the area where such doctor of medicine or osteopathy or provider took 
such action but only if — 

(1) he takes such action (in the case of a health care practi- 
tioner) in the exercise of his profession as a doctor of medicine 
or osteopathy (or in the case of a provider of health care services) 
in the exercise of his functions as a provider of health care serv- 
ices, and 

(2) he exercised due care in all professional conduct taken or 
directed^ by him and reasonably related to, and resulting from, 
the actions taken in compliance with or reliance upon such pro- 
fessionally accepted norms of care and treatment. 

Authorization for Use of Certain Funds to Administer the 

Provisions of This Part 

Sec. 1168. Expenses incurred in the administration of this part 
shall be payable from — 



341 



Sec. 1170 



(a) funds in the Federal Hospital Insurance Trust Fund; 

(b) funds in the Federal Supplementary Medical Insurance 
Trust Fund ; and 

(c) funds appropriated to carry out the health care provisions 
of the several titles of this Act ; 

in such amounts from each of the sources of funds (referred to in sub- 
sections (a), (b), and (c) ) as the Secretary shall deem to be fair and 
equitable after taking into consideration the costs attributable to the 
administration of this part with respect to each of such plans and 
programs. The Secretary shall make such transfers of moneys between 
the funds, referred to in clauses (a), (b) and (c) of the preceding 
sentence, as may be appropriate to settle accounts between them in 
cases where expenses properly payable from the funds described in 
one such clause have been paid from funds described in another of 
such clauses. 1 

Technical Assistance to Organizations Desiring To Be Designated 
as Professional Standards Review Organizations 

Sec. 1169. The Secretary is authorized to provide all necessary 
technical and other assistance (including the preparation of prototype 
plans of organization and operation) to organizations described in 
section 1152(b) (1) which — 

(a) express a desire to be designated as a Professional Stand- 
ards Review Organization ; and 

(b) the Secretary determines have a potential for meeting the 
requirements of a Professional Standards Review Organization; 

to assist such organizations in developing a proper plan to be sub- 
mitted to the Secretary and otherwise in preparing to meet the require- 
ments of this part for designation as a Professional Standards Review 
Organization. 

Exemptions of Christian Science Sanatoriums 

Sec. 1170. The provisions of this part shall not apply with respect 
to a Christian Science sanatorium operated, or listed and certified, by 
the First Church of Christ, Scientist, Boston, Massachusetts. 

ir The last sentence of section 1168 added by section 112 of Public Law 94-182 effective 
February 1, 1976. 



TITLE XII— ADVANCES TO STATE UNEMPLOYMENT 

FUNDS 

Page 1 

Sec. 1201. Advance to State Unemployment Funds 343 

Sec. 1202. Repayment by States of Advances to State Unemployment 

Funds 344 

Sec. 1203. Advances to Federal Unemployment Account 344 

Sec. 1204. Definition of Governor____ 345 

Advance to State Unemployment Funds 

Section 1201. (a) (1) Advances shall be made to the States from 
the Federal unemployment account in the Unemployment Trust 
Fund as provided in this section, and shall be repayable, without in- 
terest, in the manner provided in sections 901(d) (1), 903(b) (2), and 
1202. An advance to a State for the payment of compensation in any 
month may be made if — 

(A) the Governor of the State applies therefor no earlier than 
the first day of the preceding month, and 

( B ) he furnishes to the Secretary of Labor his estimate of the 
amount of an advance which will be required by the State for 
the payment of compensation in such month. 

(2) In the case of any application for an advance under this sec- 
tion to any State for any month, the Secretary of Labor shall — 

(A) determine the amount (if any) which he finds will be 
required by such State for the payment of compensation in such 
month, and 

(B) certify to the Secretary of the Treasury the amount (not 
greater than the amount estimated by the Governor of the State) 
determined under subparagraph (A). 

The aggregate of the amounts certified by the Secretary of Labor 
with respect to any month shall not exreed the amount which the 
Secretary of the Treasury resports to the Secretary of Labor is avail- 
able in the Federal hnemployment account for advances with respect 
to such month. 

(3) For purposes of this subsection — 

(A) an application for an advance shall be made on such forms, 
and shall contain such information and data (fiscal and other- 



This table does not appear in the law. 

(343) 



Sec. 1201(b) 



344 



wise) concerning the operation and administration of the State 
unemployment compensation law, as the Secretary of Labor 
deems necessary or relevant to the performance of his duties 
under this title, 

(B) the amount required by any State for the payment of 
compensation in any month shall be determined with due allow- 
ance for contingencies and taking into account all other amounts 
that will be available in the State's unemployment fund for the 
payment of compensation in such month, and 

(C) the term "compensation" means cash benefits payable to 
individuals with respect to their unemployment, exclusive of ex- 
penses of administration. 

(b) The Secretary of the Treasury shall, prior to audit or settle- 
ment by the General Accounting Office, transfer from the Federal 
unemployment account to the account of the State in the Unemploy- 
ment Trust Fund the amount certified under subsection (a) by the 
Secretary of Labor (but not exceeding that portion of the balance in 
the Federal unemployment account at the time of the transfer which 
is not restricted as to use pursuant to section 903 (b)(1)). 

Repayment by States of Advances to State Unemployment Funds 

Sec. 1202. The Governor of any State may at any time request that 
funds be transferred from the account of such State to the Federal 
unemployment account in repayment of part or all of that balance 
of advances, made to such State under section 1201, specified in the 
request. The Secretary of Labor shall certify to the Secretary of the 
Treasury the amount and balance specified in the request; and the 
Secretary of the Treasury shall promptly transfer such amount in 
reduction of such balance. 

Advances to Federal Unemployment Account 

Sec. 1203. There are hereby authorized to be appropriated to the 
Federal unemployment account, as repayable advances (without in- 
terest), such sums as may be necessary to carry out the purposes of 
this title. Whenever, after the application of sections 901(f) (3) and 
902(a) with respect to the excess in the employment security admin- 
istration account as of the close of any fiscal year, there remains any 
portion of such excess, so much of such remainder as does not exceed 
the balance of advances made pursuant to this section shall be trans- 
ferred to the general fund of the Treasury and shall be credited 
against, and shall operate to reduce, such balance of advances. 



345 



Sec. 1204 



Definition of Governor 

Sec. 1204. When used in this title, the term "Governor" includes 
the Commissioners of the District of Columbia. 

TITLE XIII— RECONVERSION UNEMPLOYMENT 

BENEFITS FOR SEAMEN 

[This title was added by the 1946 Amendment; however, the 
program provided by this title has expired.] 



64-310 O - 76 - 23 



TITLE XIV— GRANTS TO STATES FOR AID TO THE 
PERMANENTLY AND TOTALLY DISABLED 1 



Sec. 1401. Appropriation 



Page 3 

347 



Sec. 1402. State Plans for Aid to the Permanently and Totally Disabled.- 347 



Sec. 1405. Definition of Aid to the Permanently and Totally Disabled 354 



Section 1401. For the purpose of enabling each State to furnish 
financial assistance, as far as practicable under the conditions in such 
State, to needy individuals eighteen years of age and older who are 
permanently and totally disabled and of encouraging each State, as 
far as practicable under such conditions, to furnish rehabilitation 
and other services to help such individuals attain or retain capability 
for self-support or self-care, there is hereby authorized to be appro- 
priated for each fiscal year a sum sufficient to carry out the purposes 
of this title. The sums made available under this section shall be used 
for making payments to States which have submitted, and had ap- 
proved by the Secretary of Health, Education, and Welfare, State 
plans for aid to the permanently and totally disabled. 

State Plans for Aid to the Permanently and Totally Disabled 

Sec. 1402. (a) A State plan for aid to the permanently and totally 
disabled must (1) except to the extent permitted by the Secretary 
with respect to services, provide that it shall be in effect in all political 
subdivisions of the State, and, if administered by them, be mandatory 
upon them; (2) provide for financial participation by the State; (3) 
either provide for the establishment or designation of a single State 
agency to administer the plan, or provide for the establishment or 
designation of a single State agency to supervise the administration 
of the plan; (4) provide (A) for granting an opportunity for a fair 
hearing before the State agency to any individual whose claim for aid 
to the permanently and totally disabled is denied or is not acted upon 
with reasonable promptness, and (B) that if the State plan is admin- 



iP.L. 92-603, sec. 303, repealed title XIV effective January 1, 1974, but such repeal 
does not apply to Puerto Rico, Guam, and the Virgin Islands. 

2 This table of contents does not appear in the law. 

(347) 



Sec. 1403. Payments to States 

Sec. 1404. Operation of State Plans 



349 
354 



Appropriation 



Sec. 1402(a) 



348 



istered in each of the political subdivisions of the State by a local 
agency and such local agency provides a hearing at which evidence 
may be presented prior to a hearing before the State agency, such 
local agency may put into effect immediately upon issuance its deci- 
sion upon the matter considered at such hearing; (5) provide (A) 
such methods of administration (including methods relating to the 
establishment and maintenance of personnel standards on a merit basis 
except that the Secretary shall exercise no authority with respect to 
the selection, tenure of office, and compensation of any individual em- 
ployed in accordance with such methods) as are found by the Secre- 
tary to be necessary for the proper and efficient operation of the plan, 
and (B) for the training and effective use of paid subprofessional staff, 
with particular emphasis on the full-time or part-time employment 
of recipients and other persons of low income, as community service 
aides, in the administration of the plan and for the use of nonpaid or 
partially paid volunteers in a social service volunteer program in 
providing services to applicants and recipients and in assisting any 
advisory committees established by the State agency; (6) provide that 
the State agency will make such reports, in such form and containing 
such information, as the Secretary may from time to time require, and 
comply with such provisions as the Secretary may from time to time 
find necessary to assure *he correctness and verification of such re- 
ports; (7) provide that no aid will be furnished any individual under 
the plan with respect to any period with respect to which he is receiv- 
ing old-age assistance under the State plan approved under section 2 
of this Act, aid to families with dependent children under the State 
plan approved under section 402 of this Act, or aid to the blind 
under the State plan approved under section 1002 of this Act; 
(8) provide that the State agency shall, in determining need, take into 
consideration any other income and resources of an individual claim- 
ing aid to the permanently and totally disabled, as well as any ex- 
penses reasonably attributable to the earning of any such income; 
except that, in making such determination, (A) the State agency 
may disregard not more than $7.50 of any income, (B) of the first 
$80 per month of additional income which is earned the State agency 
may disregard not more than the first $20 thereof plus one-half of 
the remainder, and (C) the State agency may, for a period not in 
excess of 36 months, disregard such additional amounts of other in- 
come and resources, in the case of an individual who has a plan for 
achieving self-support approved by the State agency, as may be neces- 
sary for the fulfillment of such plan, but only with respect to the part 
or parts of such period during substantially all of which he is actually 
undergoing vocational rehabilitation; (9) provide safeguards which 
permit the use or disclosure of information concerning applicants or 
recipients only (A) to public officials who require such information 



349 



Sec. 1403(a) 



in connection with their official duties, or (B) to other persons for 
purposes directly connected with the administration of the State 
plan; (10) provide that all individuals wishing to make applica- 
tion for aid to the permanently and totally disabled shall have oppor- 
tunity to do so, and that aid to the permanently and totally disabled 
shall be furnished with reasonable promptness to all eligible indi- 
viduals; (11) effective July 1, 1953, provide, if the plan includes pay- 
ments to individuals in private or public institutions, for the establish- 
ment or designation of a State authority or authorities which shall be 
responsible for establishing and maintaining standards for such in- 
stitutions; and (12) provide a description of the services (if any) 
which the State agency makes available (using whatever internal orga- 
nizational arrangement it finds appropriate for this purpose) to appli- 
cants for and recipients of aid to the permanently and totally disabled 
to help them attain self-support or self-care, including a description 
of the steps taken to assure, in the provision of such services, maxi- 
mum utilization of other agencies providing similar or related 
services. 

(b) The Secretary shall approve any plan which fulfills the condi- 
tions specified in subsection (a), except that he shall not approve any 
plan which imposes, as a condition of eligibility for aid to the perma- 
nently and totally disabled under the plan — 

(1) Any residence requirement which excludes any resident of 
the State who has resided therein five years during the nine years 
immediately preceding the application for aid to the permanently 
and totally disabled and has resided therein continuously for one 
year immediately preceding the application ; 

(2) Any citizenship requirement which excludes any citizen of 
the United States. At the option of the State, the plan may provide 
that manuals and other policy issuances will be furnished to per- 
sons without charge for the reasonable cost of such materials, but 
such provision shall not be required by the Secretary as a condi- 
tion for the approval of such plan under this title. 

Payments to States 

Sec. 1403. (a) From the sums appropriated therefor, the Secretary 
of the Treasury shall pay to each State which has an approved plan 
for aid to the permanently and totally disabled, for each quarter, be- 
ginning with the quarter commencing October 1, 1958 — 

(1) in the case of any State other than Puerto Rico, the Virgin 
Islands, and Guam, an amount equal to the sum of the following 
proportions of the total amounts expended during such quarter 
as aid to the permanently and totally disabled under the State 
plan (including expenditures for premiums under part B of title 



Sec. 1403(a) 



350 



XVIII for individuals who are recipients of money payments un- 
der such plan and other insurance premiums for medical or any 
other type of remedial care or the cost thereof) — 

(A) 31 / 37 of such expenditures, not counting so much of 
any expenditure with respect to any month as exceeds the 
product of $37 multiplied by the total number of recipients of 
aid to the permanently and totally disabled for such month 
(which total number, for purposes of this subsection, means 
(i) the number of individuals who received aid to the perma- 
nently and totally disabled in the form of money payments 
for such month, plus (ii) the number of other individuals 
with respect to whom expenditures were made in such month 
as aid to the permanently and totally disabled in the form of 
medical or any other type of remedial care) ; plus 

(B) the Federal percentage of the amount by which such 
expenditures exceed the maximum which may be counted 
under clause (A), not counting so much of any expenditure 
with respect to any month as exceeds the product of $75 mul- 
tiplied by the total number of such recipients of aid to the 
permanently and totally disabled for such month ; and 

(2) in the case of Puerto Rico, and Virgin Islands, and Guam, an 
amount equal to one-half of the total of the sums expended during 
such quarter as aid to the permanently and totally disabled under the 
State plan (including expenditures for premiums under part B of title 
XVIII for individuals who are recipients of money payments under 
such plan and other insurance premiums for medical or any other type 
of remedial care or the cost thereof), not counting so much of any 
expenditure with respect to any month as exceeds $3.50 multiplied by 
the total number of recipients of aid to the permanently and totally 
disabled for such months ; and 

(3) in the case of any State whose State plan approved under section 
1402 meets the requirements of subsection (c) (1), an amount equal to 
the sum of the following proportions of the total amounts expended 
during such quarter as found necessary by the Secretary of Health, 
Education, and Welfare for the proper and efficient administration of 
the State plan — 

(A) 75 per centum of so much of such expenditures as are for — 

(i) services which are prescribed pursuant to subsection 
(c) (1) and are provided (in accordance with the next sen- 
tence) to applicants for or recipients of aid to the permanently 
and totally disabled to help them attain or retain capability 
of self-support or self -care, or 

(ii) other services, specified by the Secretary as likely to 
prevent or reduce dependency, so provided to such applicants 
or recipients, or 



351 



Sec. 1403(a) 



(iii) any of the services prescribed pursuant to subsection 
(c)(1), and of the services specified as provided in clause 
(ii), which the Secretary may specify as appropriate for in- 
dividuals who, within such period or periods as the Secretary 
may prescribe, have been or are likely to become applicants 
for or recipients of aid to the permanently and totally dis- 
abled, if such services are requested by such individuals and 
are provided to such individuals in accordance with the next 
sentence, or 

(iv) the training (including both short- and long-term 
training at educational institutions through grants to such 
institutions or by direct financial assistance to students en- 
rolled in such institutions) of personnel employed or prepar- 
ing for employment by the State agency or by the local agency 
administering the plan in the political subdivision ; plus 

(B) one-half of so much of such expenditures (not in- 
cluded under subparagraph ( A) ) as are for services pro- 
vided (in accordance with the next sentence) to applicants for 
or recipients of aid to the permanently and totally disabled, 
and to individuals requesting such services who (within such 
period or periods as the Secretary may prescribe) have been 
or are likely to become applicants for or recipients of such 
aid; plus 

(C) one-half of the remainder of such expenditures. 

The services referred to in subparagraphs (A) and (B) shall 
except to the extent specified by the Secretary, include only — 

(D) services provided by the staff of the State agency, or 
of the local agency administering the State plan in the politi- 
cal subdivision: Provided, That no funds authorized under 
this title shall be available for services defined as vocational 
rehabilitation services under the Vocational Rehabilitation 
Act (i) which are available to individuals in need of them 
under programs for their rehabilitation carried on under a 
State plan approved under such Act, or (ii) which the State 
agency or agencies administering or supervising the adminis- 
tration of the State plan approved under such Act are able 
and willing to provide if reimbursed for the cost thereof pur- 
suant to agreement under subparagraph (E), if provided by 
such staff, and 

(E) Under conditions which shall be prescribed by the 
Secretary, services which in the judgment of the State agency 
cannot be as economically or as effectively provided by the 
staff of such State or local agency and are not otherwise 
reasonably available to individuals in need of .them, and 



Sec. 1403(b) 



352 



which are provided pursuant to agreement with the State 
agency, by the State health authority or the State agency or 
agencies administering or supervising the administration of 
the State plan for vocational rehabilitation services approved 
under the Vocational Rehabilitation Act or by any other State 
agency which the Secretary ma} 7 determine to be appropriate 
(whether provided by its staff or by contract with public 
(local) or nonprofit private agencies) ; 
except that services described in clause (ii) of subparagraph (D) 
hereof may be provided only pursuant to agreement with such 
State agency or agencies administering or supervising the admin- 
istration of the State plan for vocational rehabilitation services 
so approved. The portion of the amount expended for administra- 
tion of the State plan to which subparagraph (A) applies and the 
portion thereof to which subparagraphs (B) and (C) apply shall 
be determined in accordance with such methods and procedures 
as may be permitted by the Secretary ; and 

(4) in the case of any State whose State plan approved under 
section 1402 does not meet the requirements of subsection (c)(1), 
an amount equal to one-half of the total of the sums expended 
during such quarter as found necessary by the Secretary for the 
proper and efficient administration of the State plan, including 
services referred to in paragraph (3) and provided in accordance 
with the provisions of such paragraph, 
(b) The method of computing and paying such amounts shall be 
as follows: 

(1) The Secretary of Health, Education, and Welfare shall, 
prior to the beginning of each quarter, estimate the amount to 
be paid to the State for such quarter under the provisions of sub- 
section (a), such estimate to be based on (A) a report filed by the 
State containing its estimate of the total sum to be expended in 
such quarter in accordance with the provisions of such subsection, 
and stating the amount appropriated or made available by the 
State and its political subdivisions for such expenditures in such 
quarter, and if such amount is less than the State's proportionate 
share of the total sum of such estimated expenditures, the source 
or sources from which the difference is expected to be derived, 
(B) records showing the number of permanently and totally dis- 
abled individuals in the State, and (C) such other investigation 
as the Secretary may find necessary. 

(2) The Secretary of Health, Education, and Welfare shall 
then certify to the Secretary of the Treasury the amount so esti- 
mated by the Secretary of Health, Education, and Welfare, (A) 
reduced or increased, as the case may be, by any sum by which 



353 



Sec. 1403(c) 



the Secretary of Health, Education, and Welfare finds that his 
estimate for any prior quarter was greater or less than the amount 
which should have been paid to the State under subsection (a) 
for such quarter, and (B) reduced by a sum equivalent to the 
pro rata share to which the United States is equitably entitled 
as determined by the Secretary of Health, Education, and Wel- 
fare, of the net amount recovered during a prior quarter by the 
State or any political subdivision thereof with respect to aid to 
the permanently and totally disabled furnished under the State 
plan; except that such increases or reductions shall not be made 
to the extent that such sums have been applied to make the amount 
certified for any prior quarter greater or less than the amount 
estimated by the Secretary of Health, Education, and Welfare for 
such prior quarter: Provided, That any part of the amount re- 
covered from the estate of a deceased recipient which is not in 
excess of the amount expended by the State or any political sub- 
division thereof for the funeral expenses of the deceased shall not 
be considered as a basis for reduction under clause (B) of this 
paragraph. 

(3) The Secretary of the Treasury shall thereupon, through the 
Fiscal Service of the Treasury Department, and prior to audit or 
settlement by the General Accounting Office, paid to the State, 
at the time or times fixed by the Secretary of Health, Education, 
and Welfare, the amount so certified, 
(c) (1) In order for a State to qualify for payments under para- 
graph (3) of subsection (a), its State plan approved under section 
1402 must provide that the State agency shall make available to appli- 
cants for or recipients of aid to the permanently and totally disabled 
at least those services to help them attain or retain capability for self- 
support or self-care which are prescribed by the Secretary. 

(2) In the case of any State whose State plan included a provision 
meeting the requirements of paragraph ( 1 ) , but with respect to which 
the Secretary finds, after reasonable notice and opportunity for hear- 
ing to the State agency administering or supervising the administra- 
tion of such plan, that — 

(A) the provision has been so changed that it no longer com- 
plies with the requirements of paragraph ( 1 ) , or 

(B) in the administration of the plan there is a failure to com- 
ply substantially with such provision. 

the Secretary shall notify such State agency that further payments 
will not be made to the State under paragraph (3) of subsection (a) 

until he is satisfied that there will no longer be any such failure to 
comply. Until the Secretary is so satisfied further payments with 
respect to the administration of such State plan shall not be made 
under paragraph (3) of subsection (a) but shall instead be made, 



Sec. 1404 



354 



subject to the other provisions of this title, under paragraph (4) of 
such subsection. 

Operation of State Plans 

Sec. 1404. In the case of any State plan for aid to the permanently 
and totally disabled which has been approved by the Secretary of 
Health, Education, and Welfare, if the Secretary after reasonable 
notice and opportunity for hearing to the State agency administering 
or supervising the administration of such plan, finds — 

(1) that the plan has been so changed as to impose any resi- 
dence or citizenship requirements prohibited by section 1402(b), 
or that in the administration of the plan any such prohibited re- 
quirement is imposed, with the knowledge of such State agency, in 
a substantial number of cases ; or 

(2) that in the administration of the plan there is a failure to 
comply substantially with any provision required by section 1402 
(a) to be included in the plan ; 

the Secretary shall notify such State agency for further payments 
will not be made to the State (or, in his discretion, that payments will 
be limited to categories under or parts of the State plan not affected by 
such failure) until he is satisfied that such prohibited requirement 
is no longer so imposed and that there is no longer any such failure to 
comply. Until he is so satisfied he shall make no further payments to 
such State (or shall limit payments to categories under or parts of the 
State plan not affected by such failure) . 

Definition 

Sec. 1405. For the purposes of this title, the term "aid to the per- 
manently and totally disabled" means money payments to, or (if pro- 
vided in or after the third month before the month in which the 
recipient makes application for aid) medical care in behalf of, or any 
type of remedial care recognized under State law in behalf of, needy 
individuals eighteen years of age or older who are permanently and 
totally disabled, but does not include any such payments to or care in 
behalf of any individual who is an inmate of a public institution 
(except as a patient in a medical institution) or any individual who 
is a patient in an institution for tuberculosis or mental diseases. Such 
term also includes payments which are not included within the mean- 
ing of such term under the preceding sentence, but which would be 
so included except that they are made on behalf of such a needy indi- 
vidual to another individual who (as determined in accordance with 
standards prescribed by the Secretary) is interested in or concerned 
with the welfare of such needy individual, but only with respect to a 
State whose State plan approved under section 1402 includes provision 
for — 



355 



Sec. 1405 



(1) determination by the State agency that such needy indi- 
vidual has, by reason of his physical or mental condition, such 
inability to manage funds that making payments to him would 
be contrary to his welfare and, therefore, it is necessary to pro- 
vide such aid through payments described in this sentence; 

(2) making such payments only in cases in which such pay- 
ments will, under the rules otherwise applicable under the State 
plan for determining need and the amount of aid to the perma- 
nently and totally disabled to be paid (and in conjunction with 
other income and resources), meet all the need of the individuals 
with respect to whom such payments are made ; 

(3) undertaking and continuing special efforts to protect the 
welfare of such individual and to improve, to the extent possible, 
his capacity for self -care and to manage funds ; 

(4) periodic review by such State agency of the determination 
under paragraph (1) to ascertain whether conditions justifying 
such determination still exist, with provision for termination of 
such payments if they do not and for seeking judicial appoint- 
ment of a guardian or other legal representative, as described in 
section 1111, if and when it appears that such action will best 
serve the interests of such needy individual ; and 

(5) opportunity for a fair hearing before the State agency on 
the determination referred to in paragraph (1) for any individ- 
ual with respect to whom it is made. 

At the option of a State (if its plan approved under this title so 
provides), such term (i) need not include money payments to an 
individual who has been absent from such State for a period in excess 
of ninety consecutive days (regardless of whether he has maintained 
his residence in such State during such period) until he has been 
present in such State for thirty consecutive days in the case of such 
an individual who has maintained his residence in such State during 
such period or ninety consecutive days in the case of any other such 
individual, and (ii) may include rent payments made directly to a 
public housing agency on behalf of a recipient or a group or groups 
of recipients of aid under such plan. 

TITLE XV — UNEMPLOYMENT COMPENSATION FOR FED- 
ERAL EMPLOYEES AND THE EX-SERVICEMEN'S UN- 
EMPLOYMENT COMPENSATION PROGRAM 

[P.L. 89-554, 80 Stat. 378, approved September 6, 1966, repealed 
title XV of the Social Security Act (68 Stat. 1130; 72 Stat. 1087), 
and codified the provisions thereof as chapter 85 of title 5 of the 
United States Code.] 



TITLE XVI— GKANTS TO STATES FOR AID TO THE AGED, 
BLIND, OR DISABLED, OR FOR SUCH AID AND MEDI- 
CAL ASSISTANCE FOR THE AGED 1 

Page 2 



Sec. 1601. Appropriation 357 

Sec. 1602. State Plans for Aid to Aged, Blind, or Disabled, or for Such 

Aid and Medical Assistance for the Aged 357 

Sec. 1603. Payments to States 363 

Sec. 1604. Operation of State Plans 369 

Sec. 1605. Definitions 369 



Appropriation 

Section 1601. For the purpose (a) of enabling each State, as far as 
practicable under the conditions in such State, to furnish financial 
assistance to needy individuals who are 65 years of age or over, are 
blind, or are 18 years of age or over and permanently and totally 
disabled, (b) of enabling each State, as far as practicable under the 
conditions in such State, to furnish medical assistance on behalf of 
individuals who are 65 years of age or over and who are not recipients 
of aid to the aged, blind, or disabled but whose income and resources 
are insufficient to meet the costs of necessary medical services, and (c) 
of encouraging each State, as far as practicable under the conditions 
in such State, to furnish rehabilitation and other services to help 
individuals referred to in clause (a) or (b) to attain or retain capa- 
bility for self-support or self-care, there is hereby authorized to be 
appropriated for each fiscal year a sum sufficient to carry out the pur- 
poses of this title. The sums made available under this section shall 
be used for making payments to States which have submitted, and 
had approved by the Secretary of Health, Education, and Welfare, 
State plans for aid to the aged, blind, or disabled, or for aid to the 
aged, blind, or disabled and medical assistance for the aged. 

State Plans for Aid to the Aged, Blind, or Disabled, or for Such 
Aid and Medical Assistance for the Aged 

Sec. 1602. (a) A State plan for aid to the aged, blind, or dis- 
abled, or for aid to the aged, blind, or disabled and medical assistance 
for the aged, must — 

X P.L. 92-603, section 301, amended title XVI in its entirety under the title "Supple- 
mental Security Income for the Aged, Blind, and Disabled," effective January 1, 1974, but 
pursuant to P.L. 92-603, sec. 303(b), such amendment does not apply to Puerto Rico, 
Guam, and the Virgin Islands. The amended title starts on page 373, this volume. 

2 This table of contents does not appear in the law. 

(357) 



Sec. 1602(a) 



358 



(1) except to the extent permitted by the Secretary with re- 
spect to services, provide that it shall be in effect in all political 
subdivisions of the State, and if administered by them, be manda- 
tory upon them; 

(2) provide for financial participation by the State; 

(3) either provide for the establishment or designation of a 
single State agency to administer the plan, or provide for the 
establishment or designation of a single State agency to supervise 
the administration of the plan; 

(4) (A) provide for granting an opportunity for a fair hear- 
ing before the State agency to any individual whose claim for aid 
or assistance under the plan is denied or is not acted upon with 
reasonable promptness, and (B) that if the State plan is admin- 
istered in each of the political subdivisions of the State by a local 
agency and such local agency provides a hearing at which evi- 
dence may be presented prior to a hearing before the State agency, 
such local agency may put into effect immediately upon issuance 
its decision upon the matter considered at such hearing ; 

(5) provide (A) such methods of administration (including 
methods relating to the establishment and maintenance of per- 
sonnel standards on a merit basis, except that the Secretary shall 
exercise no authority with respect to the selection, tenure of office, 
and compensation of any individual employed in accordance with 
such methods) as are found by the Secretary to be necessary for 
the proper and efficient operation of the plan, and (B) for the 
training and effective use of paid subprofessional staff, with par- 
ticular emphasis on the full-time or part-time employment of 
recipients and other persons of low income, as community serv- 
ice aides, in the administration of the plan and for the use of 
nonpaid or partially paid volunteers in a social service volunteer 
program in providing services to applicants and recipients and in 
assisting any advisory committees established by the State agency ; 

(6) provide that the State agency will make such reports, in 
such form and containing such information, as the Secretary may 
from time to time require, and comply with such provisions as 
the Secretary may from time to time find necessary to assure the 
correctness and verification of such reports; 

(7) provide safeguards which permit the use or disclosure of 
information concerning applicants or recipients only (A) to pub- 
lic officials who require such information in connection with their 
official duties, or (B) to other persons for purposes directly con- 
nected with the administration of the State plan ; 

(8) provide that all individuals wishing to make application 
for aid or assistance under the plan shall have opportunity to 



359 



Sec. 1602(a) 



do so, and that such aid or assistance shall be furnished with 
reasonable promptness to all eligible individuals; 

(9) provide, if the plan includes aid or assistance to or on be- 
half of individuals in private or public institutions, for the estab- 
lishment or designation of a State authority or authorities which 
shall be responsible for establishing and maintaining standards 
for; 

(10) provide a description of the services (if any) which the 
State agency makes available (using whatever internal organiza- 
tional arrangement it finds appropriate for this purpose) to ap- 
plicants for or recipients of aid or assistance under the plan to 
help them attain self-support or self-care, including a description 
of the steps taken to assure, in the provision of such services, maxi- 
mum utilization of other agencies providing similar or related 
services ; 

(11) provide that no aid or assistance will be furnished any 
individual under the plan with respect to any period with respect 
to which he is receiving assistance under the State plan approved 
under title I or aid under the State plan approved under part A 
of title IV or under title X or XIV ; 

(12) provide that, in determining whether an individual is 
blind, there shall be an examination by a physician skilled in 
the diseases of the eye or by an optometrist, whichever the indi- 
vidual may select; 

(13) include reasonable standards, consistent with the objec- 
tives of this title, for determining eligibility for and the extent 
of aid or assistance under the plan ; 

(14) provide that the State agency shall, in determining need 
for aid to the aged, blind, or disabled, take into consideration 
any other income and resources of an individual claiming such 
aid as well as any expenses reasonably attributable to the earn- 
ing of any such income ; except that, in making such determina- 
tion with respect to any individual — 

(A) if such individual is blind, the State agency (i) shall 
disregard the first $85 per month of earned income plus one- 
half of earned income in excess of $85 per month, and (ii) 
shall, for a period not in excess of 12 months, and may, for 
a period not in excess of 36 months, disregard such additional 
amounts of other income and resources, in the case of any 
such individual who has a plan for achieving self-support 
approved by the State agency, as may be necessary for the 
fulfillment of such plan, 

(B) if such individual is not blind but is permanently and 
totally disabled, (i) of the first $80 per month of earned 



Sec. 1602(a) 



360 



income, the State agency may disregard not more than the 
first $20 thereof plus one-half of the remainder, and (ii) the 
State agency may, for a period not in excess of 36 months, 
disregard such additional amounts of other income and re- 
sources, in the case of any such individual who has a plan 
for achieving self-support approved by the State agency, 
as may be necessary for the fulfillment of such plan, but only 
with respect to the part or parts of such period during sub- 
stantially all of which he is actually undergoing vocational 
rehabilitation, 

(C) if such individual has attained age 65 and is neither 
blind nor permanently and totally disabled, of the first $80 
per month of earned income the State agency may disregard 
not more than the first $20 thereof plus one-half of the 
remainder, and 

(D) the State agency may, before disregarding the 
amounts referred to above in this paragraph (14), disregard 
not more than $7.50 of any income ; 

(15) if the State plan includes medical assistance for the aged — 

(A) provide for inclusion of some institutional and some 
noninstitutional care and services; 

(B) provide that no enrollment fee, premium, or similar 
charge will be imposed as a condition of any individual's 
eligibility for medical assistance for the aged under the plan ; 

(C) provide for inclusion, to the extent required by regu- 
lations prescribed by the Secretary, of provisions (conform- 
ing to such regulations) with respect to the furnishing of 
such assistance to individuals who are residents of the State 
but are absent therefrom ; and 

(D) provide that no lien may be imposed against the 
property of any individual prior to his death on account of 
medical assistance for the aged paid or to be paid on his be- 
half under the plan (except pursuant to the judgment of a 
court on account of benefits incorrectly paid on behalf of 
such individual), and that there shall be no adjustment or 
recovery (except, after the death of such individual and his 
surviving spouse, if any, from such individual's estate) of 
any medical assistance for the aged correctly paid on behalf 
of such individual under the plan ; 

(16) if the State plan includes aid or assistance to or in behalf 
of individuals 65 years of age or older who are patients in institu- 
tions for mental diseases — 

(A) provide for having in effect such agreements or other 
arrangements with State authorities concerned with mental 



361 



Sec. 1602(a) 



diseases, and where appropriate, with such institutions, as 
may be necessary for carrying out the State plan, including 
arrangements for joint planning and for development of 
alternate methods of care, arrangements providing assurance 
of immediate readmittance to institutions where needed for 
individuals under alternate plans of care, and arrangements 
providing for access to patients and facilities for furnishing 
information, and for making reports ; 

(B) provide for an individual plan for each such patient 
to assure that the institutional care provided to him is in his 
best interests, including, to that end, assurances that there 
will be initial and periodic review of his medical and other 
needs, that he will be given appropriate medical treatment 
within the institution, and that there will be a periodic 
determination of his need for continued treatment in the 
institution ; 

(C) provide for the development of alternate plans of 
care, making maximum utilization of available resources, for 
recipients 65 years of age or older who would otherwise need 
care in such institutions, including appropriate medical 
treatment and other aid or assistance; for services referred 
to in section 1603(a)(4)(A) (i) and (ii) which are appro- 
priate for such recipients and for such patients; and for 
methods of administration necessary to assure that the re- 
sponsibilities of the State agency under the State plan with 
respect to such recipients and such patients will be effectively 
carried out ; and 

(D) provide methods of determining the reasonable cost 
of institutional care for such patients ; and 

(17) if the State plan includes aid or assistance to or in behalf 
of individuals 65 years of age or older who are patients in public 
institutions for mental diseases, show that the State is making 
satisfactory progress toward developing and implementing a 
comprehensive mental health program, including provision for 
utilization of community mental health centers, nursing homes, 
and other alternatives to care in public institutions for mental 
diseases; 

Xotwithstanding paragraph (3), if on January 1, 1962, and on the 
date on which a State submits its plan for approval under this title, 
the State agency which administered or supervised the administration 
of the plan of such State approved under title X was different from 
the State agency which administered or supervised the administration 
of the plan of such State approved under title I and the State agency 
which administered or supervised the administration of the plan 



64-310 O - 76 - 24 



Sec. 1602(b) 



362 



of such State approved under title XIV, the State agency which 
administered or supervised the administration of such plan approved 
under title X may be designated to administer or supervise the admin- 
istration of the portion of the State plan for aid to the aged, blind, 
or disabled (or for aid to the aged, blind, or disabled and medical 
assistance for the aged) which relates to blind individuals and a 
separate State agency may be established or designated to administer 
or supervise the administration of the rest of such plan ; and in such 
case the part of the plan which each such agency administers, or the 
administration of which each such agency supervises, shall be regarded 
as a separate plan for purposes of this title. 

(b) The Secretary shall approve any plan which fulfills the condi- 
tions specified in subsection (a), except that he shall not approve any 
plan which imposes, as a condition of eligibility for aid or assistance 
under the plan — 

(1) an age requirement of more than sixty-five years; or 

(2) any residence requirement which (A) in the case of appli- 
cants for aid to the aged, blind, or disabled excludes any resident 
of the State who has resided therein five years during the nine 
years immediately preceding the application for such aid and has 
resided therein continuously for one year immediately preceding 
the application, and (B) in the case of applicants for medical 
assistance for the aged, excludes any individual who resides in 
the State ; or 

(3) any citizenship requirement which excludes any citizen of 
the United States. 

At the option of the State, the plan may provide that manuals and 
other policy issuances will be furnished to persons without charge for 
the reasonable cost of such materials, but such provision shall not be 
required by the Secretary as a condition for the approval of such plan 
under this title. In the case of any State to which the provisions of 
section 344 of the Social Security Act Amendments of 1950 were 
applicable on January 1, 1962, and to which the sentence of section 
1002(b) following paragraph (2) thereof is applicable on the date on 
which its State plan for aid to the aged, blind or disabled (or for aid 
to the aged, blind, or disabled and medical assistance for the aged) 
was submitted for approval under this title, the Secretary shall ap- 
prove the plan of such State for aid to the aged, blind, or disabled 
(or for aid to the aged, blind, or disabled and medical assistance for 
the aged) for purposes of this title, even though it does not meet the 
requirements of paragraph (14) of subsection (a) if it meets all other 
requirements of this title for an approved plan for aid to the aged, 
blind, or disabled (or for aid to the aged, blind, or disabled and med- 
ical assistance for the aged) ; but payments under section 1603 shall 



363 



Sec. 1603(a) 



be made, in the case of any such plan, only with respect to expendi- 
tures thereunder which would be included as expenditures for the 
purposes of section 1603 under a plan approved under this section 
without regard to the provisions of this sentence. 

(c) Subject to the last sentence of subsection (a), nothing in this 
title shall be construed to permit a State to have in effect with respect 
to any period more than one State plan approved under this title. 

Payments to States 

Sec. 1603. (a) From the sums appropriated therefor, the Sec- 
retary shall pay to each State which has a plan approved under this 
title, for each quarter, beginning with the quarter commencing October 
1,1962— 

( 1 ) in the case of any State other than Puerto Rico, the Virgin 
Islands, and Guam, an amount equal to the sum of the following 
proportions of the total amounts expended during each month of 
such quarters to the aged, blind, or disabled under the State plan 
(including expenditures for premiums under Part B of title 
XVIII for individuals who are recipients of money payments 
under such plan and other insurance premiums for medical or 
any other type of remedial care or the cost thereof) — 

(A) 3 y 37 of such expenditures, not counting so much of 
any expenditure with respect to such month as exceeds the 
product of $37 multiplied by the total number of recipients of 
such aid for such month (which total number, for purposes 
of this subsection means (i) the number of individuals who 
received such aid in the form of money payments for such 
month, plus (ii) the number of other individuals with re- 
spect to whom expenditures were made in such month as aid 
to the aged, blind, or disabled in the form of medical or any 
other type of remedial care) ; plus 

(B) the larger of the following: 

(i) (I) the Federal percentage (as defined in section 
1101(a) (8) ) of the amount by which such expenditures 
exceed the amount which may be counted under clause 
(A), not counting so much of such excess with respect 
to such month as exceeds the product of $38 multiplied 
by the total number of recipients of aid to the aged, blind, 
or disabled for such month, plus (II) 15 per centum of 
the total expended during such month as aid to the aged, 
blind, or disabled under the State plan in the form of 
medical or any other type of remedial care, not counting 
so much of such expenditure with respect to such month 



Sec. 1603(a) 



364 



as exceeds the product of $15 multiplied by the total 
number of recipients of aid to the aged, blind, or disabled 
for such month, or 

(ii) (I) the Federal medical percentage (as defined 
in section 6(c)) of the amount by which such expendi- 
tures exceed the maximum which may be counted under 
clause (A), not counting so much of any expenditure 
with respect to such month as exceeds (a) the product of 
$52 multiplied by the total number of such recipients of 
aid to the aged, blind, or disabled for such month, or (b) 
if smaller, the total expended as aid to the aged, blind, or 
disabled in the form of medical or any other type of 
remedial care with respect to such month plus the prod- 
uct of $37 multiplied by such total number of such re- 
cipients plus (II) the Federal percentage of the amount 
by which the total expended during such month as aid to 
the aged, blind, or disabled under the State plan exceeds 
the amount which may be counted under clause (A) and 
the preceding provisions of this clause (B)(ii), not 
counting so much of such excess with respect to such 
month as exceeds the product of $38 multiplied by the 
total number of such recipients of aid to the aged, blind, 
or disabled for such month ; 
(2) in the case of Puerto Eico, the Virgin Islands, and Guam, 
an amount equal to — 

(A) one-half of the total of the sums expended during such 
quarter as aid to the aged, blind, or disabled under the State 
plan (including expenditures for premiums under part B of 
title XVIII for individuals who are recipients of money pay- 
ments under such plan and other insurance premiums for 
medical or any other type of remedial care or the cost there- 
of), not counting so much of any expenditure with respect to 
any month as exceeds $37.50 multiplied by the total number 
of recipients of aid to the aged, blind, or disabled for such 
month; plus 

(B) the larger of the following amounts: (i) one-half of 
the amount by which such expenditures exceed the maximum 
which may be counted under clause (A), not counting so 
much of any expenditure with respect to any month as ex- 
ceeds (I) the product of $45 multiplied by the total number 
of such recipients of aid to the aged, blind, or disabled for 
such month, or (II) if smaller, the total expended as aid to 
the aged, blind, or disabled in the form of medical or any 
other type of remedial care with respect to such month plus 



365 Sec. 1603(a) 

the product of $37.50 multiplied by the total number of such 
recipients, or (ii) 15 per centum of the total of the sums ex- 
pended during such quarter as aid to the aged, blind, or dis- 
abled under the State plan in the form of medical or any 
other type of remedial care, not counting so much of any ex- 
penditure with respect to any month as exceeds the product 
of $7.50 multiplied by the total number of such recipients of 
aid to the aged, blind, or disabled for such month ; 

(3) in the case of any State, an amount equal to the Federal 
medical percentage (as defined in section 61(c)) of the total 
amounts expended during such quarter as medical assistance for 
the aged under the State plan (including expenditures for in- 
surance premiums for medical or any other type of remedial care 
or the cost thereof) ; and 

(4) in the case of any State whose State plan approved under 
section 1602 meets the requirements of subsection (c)(1), an 
amount equal to the sum of the following proportions of the total 
amounts expended during each quarter as found necessary by the 
Secretary of Health, Education, and Welfare for the proper and 
efficient administration of the State plan — 

(A) 75 per centum of so much of such expenditures as are 
for — 

(i) services which are prescribed pursuant to subsec- 
tion (c) (1) and are provided (in accordance with the 
next sentence) to applicants for or recipients of aid or 
assistance under the plan to help them attain or retain 
capability for self-support or self-care, or 

(ii) other services, specified by the Secretary as likely 
to prevent or reduce dependency, so provided to such 
applicants or recipients, or 

(iii) any of the services prescribed pursuant to sub- 
section (c) (1), and of the services specified as provided 
in clause (ii), which the Secretary may specify as ap- 
propriate for individuals who, within such period or pe- 
riods as the Secretary may prescribe, have been or are 
likely to become applicants for or recipients of aid or 
assistance under the plan if such services are requested 
by such individuals and are provided to such individuals 
in accordance with the next sentence, or 

(iv) the training (including both short- and long-term 
training at educational institutions through grants to 
such institutions or by direct financial assistance to stu- 
dents enrolled in such institutions) of personnel employed 
or preparing for employment by the State agency or by 



Sec. 1603(a) 



366 



the local agency administering the plan in the political 
subdivision; plus 

(B) one-half of so much of such expenditures (not in- 
cluded under subparagraph (A)) as are for services pro- 
vided (in accordance with the next sentence) to applicants 
for or recipients of aid or assistance under the plan, and to 
individuals requesting such services who (within such pe- 
riod or periods as the Secretary may prescribe) have been or 
are likely to become applicants for or recipients of such aid 
or assistance; 

(C) one-half of the remainder of such expenditures. The 
services referred to in subparagraphs (A) and (B) shall, 
except to the extent specified by the Secretary, include only — 

(D) services provided by the staff of the State agency, or 
of the local agency administering the State plan in the polit- 
ical subdivision: Provided, That no funds authorized under 
this title shall be available for services defined as vocational 
rehabilitation services under the Vocational Rehabilitation 
Act (i) which are available to individuals in need of them 
under programs for their rehabilitation carried on under a 
State plan approved under such Act, or (ii) which the State 
agency or agencies administering or supervising the adminis- 
tration of the State plan approved under such Act are able 
and willing to provide if reimbursed for the cost thereof pur- 
suant to agreement under subparagraph (E), if provided by 
such staff, and 

(E) under conditions which shall be prescribed by the 
Secretary, services which in the judgment of the State agency 
cannot be as economically or as effectively provided by the 
staff of such State or local agency and are not otherwise 
reasonably available to individuals in need of them, and 
which are provided, pursuant to agreement with the State 
agency, by the State health authority or the State agency or 
agencies administering or supervising the administration of 
the State plan for vocational rehabilitation services approved 
under the Vocational Rehabilitation Act or by any other State 
agency which the Secretary may determine to be appropriate 
(whether provided by its staff or by contract with public 
(local) or nonprofit private agencies) ; 

except that services described in clause (ii) of subparagraph (D) 
hereof may be provided only pursuant to agreement with such 
State agency or agencies administering or supervising the admin- 
istration of the State plan for vocational rehabilitation services 
so approved. The portion of the amount expended for administra- 



367 



Sec. 1603(c) 



tion of the State plan to which subparagraph (A) applies and the 
portion thereof to which subparagraphs (B) and (C) apply shall 
be determined in accordance with such methods and procedures as 
may be permitted by the Secretary ; and 

(5) in the case of any State whose State plan approved under 
section 1602 does not meet the requirements of subsection (c)(1), 
an amount equal to one-half of the total of the sums expended dur- 
ing such quarter as found necessary by the Secretary for the 
proper and efficient administration of the State plan, including 
services referred to in paragraph (4) and provided in accordance 
with the provisions of such paragraph. 

(b) (1) Prior to the beginning of each quarter, the Secretary shall 
estimate the amount to which a State will be entitled under subsection 
(a) for such quarter, such estimates to be based on (A) a report filed 
by the State containing its estimate of the total sum to be expended in 
such quarter in accordance with the provisions of such subsection, and 
stating the amount appropriated or made available by the State and 
its political subdivisions for such expenditures in such quarter, and 
if such amount is less than the State's proportionate share of the total 
sum of such estimated expenditures, the source or sources from which 
the difference is expected to be derived, and (B) such other investiga- 
tion as the Secretary may find necessary. 

(2) The Secretary shall then pay, in such installments as he may 
determine, to the State the amount so estimated, reduced or increased 
to the extent of any overpayment or underpayment which the Sec- 
retary determines was made under this section to such State for any 
prior quarter and with respect to which adjustment has not already 
been made under this subsection. 

(3) The pro rata share to which the United States is equitably 
entitled, as determined by the Secretary, of the net amount recovered 
during any quarter by the State or any political subdivision thereof 
with respect to aid or assistance furnished under the State plan, but 
excluding any amount of such aid or assistance recovered from the 
estate of a deceased recipient which is not in excess of the amount 
expended by the State or any political subdivision thereof for the 
funeral expenses of the deceased, shall be considered an overpayment 
to be adjusted under this subsection. 

(4) Upon the making of any estimate by the Secretary under this 
subsection, any appropriations available for payments under this sec- 
tion shall be deemed obligated. 

(c) (1) In order for a State to qualify for payments under para- 
graph (4) of subsection (a), its State plan approved under section 
1602 must provide that the State agency shall make available to 
applicants for or recipients of aid to the aged, blind, or disabled under 



Sec. 1603(d) 



368 



such State plan at least those services to help them attain or retain 
capability for self-support or self-care which are prescribed by the 
Secretary. 

(2) In the case of any State whose State plan included a provision 
meeting the requirements of paragraph (1), but with respect to 
which the Secretary finds, after reasonable notice and opportunity 
for hearing to the State agency, administering or supervising the 
administration of such plan, that — 

(A) the provision has been so changed that it no longer com- 
plies with the requirements of paragraph ( 1 ) , or 

(B) in the administration of the plan there is a failure to 
comply substantially with such provision, 

the Secretary shall notify such State agency that further payments 
will not be made to the State under paragraph (4) of subsection (a) 
until he is satisfied that there will no longer be any such failure to 
comply. Until the Secretary is so satisfied further payments with re- 
spect to the administration of such State plan shall not be made under 
paragraph (4) of subsection (a) but shall instead be made, subject 
to the other provisions of this title, under paragraph (5) of such 
subsection. 

(d) Notwithstanding the preceding provisions of this section, the 
amount determined under such provisions for any State for any 
quarter which is attributable to expenditures with respect to indi- 
viduals 65 years of age or older who are patients in institutions for 
mental diseases shall be paid only to the extent that the State makes 
a showing satisfactory to the Secretary that total expenditures in the 
State from Federal, State, and local sources for mental health serv- 
ices (including payments to or in behalf of individuals with mental 
health problems) under State and local public health and public 
welfare programs for such quarter exceed the average of the total 
expenditures in the State from such sources for such services under 
such programs for each quarter of the fiscal year ending June 30, 
1965. For purposes of this subsection, expenditures for such services 
for each quarter in the fiscal year ending June 30, 1965, in the case 
of any State shall be determined on the basis of the latest data, satis- 
factory to the Secretary, available to him at the time of the first 
determination by him under this subsection for such State; and ex- 
penditures for such services for any quarter beginning after Decem- 
ber 31, 1965, in the case of any State shall be determined on the basis 
of the latest data, satisfactory to the Secretary, available to him at 
the time of the determination under this subsection for such State 
for such quarter; and determinations so made shall be conclusive for 
purposes of this subsection. 



369 



Sec. 1605(a) 



Operation of State Plans 

Sec. 1604. If the Secretary, after reasonable notice and opportunity 
for hearing to the State agency administering or supervising the ad- 
ministration of the State plan approved under this title, finds — 

(1) that the plan has been so changed that it no longer com- 
plies with the provisions of section 1602 ; or 

(2) that in the administration of the plan there is a failure to 
comply substantially with any such provision ; 

the Secretary shall notify such State agency that further payments 
will not be made to the State (or, in his discretion, that payments will 
be limited to categories under or parts of the State plan not affected 
by such failure), until the Secretary is satisfied that there will no 
longer be any such failure to comply. Until he is so satisfied he shall 
make no further payments to such State (or shall limit payments to 
categories under or parts of the State plan not affected by such 
failure). 

Definitions 

Sec. 1605. (a) For purposes of this title, the term "aid to the 
aged, blind, or disabled" means money payments to, or (if provided 
in or after the third month before the month in which the recipient 
makes application for aid) medical care in behalf of or any type of 
remedial care recognized under State law in behalf of, needy individ- 
uals who are 65 years of age or older, are blind, or are 18 years of age 
or over and permanently and totally disabled, but such term does not 
include — 

(1) any such payments to or care in behalf of any individual 
who is an inmate of a public institution (except as a patient in a 
medical institution) ; or 

(2) any such payments to or care in behalf of any individual 
who has not attained 65 years of age and who is a patient in an 
institution for tuberculosis or mental diseases. 

Such term also includes payments which are not included within the 
meaning of such term under the preceding sentence, but which would 
be so included except that they are made on behalf of such a needy 
individual to another individual who (as determined in accordance 
with standards prescribed by the Secretary) is interested in or con- 
cerned with the welfare of such needy individual, but only with re- 
spect to a State whose State plan approved under section 1602 includes 
provision for — 

(A) determination by the State agency that such needy indi- 
vidual has, by reason of his physical or mental condition, such 
inability to manage funds that making payments to him would 
be contrary to his welfare and, therefore, it is necessary to provide 
such aid through payments described in this sentence ; 



Sec. 1605(b) 



370 



(B) making such payments only in cases in which such pay- 
ments will, under the rules otherwise applicable under the State 
plan for determining need and the amount of aid to the aged, 
blind, or disabled to be paid (and in conjunction with other in- 
come and resources), meet all the need of the individuals with 
respect to whom such payments are made ; 

(C) undertaking and continuing special efforts to protect the 
welfare of such individual and to improve, to the extent possible, 
his capacity for self-care and to manage funds ; 

(D) periodic review by such State agency of the determination 
under clause (A) to ascertain whether conditions justify such de- 
termination still exist, with provision for termination of such 
payments if they do not and for seeking judicial appointment of 
a guardian or other legal representative, as described in section 
1111, if and when it appears that such action will best serve the 
interests of such needy individual ; and 

(E) opportunity for a fair hearing before the State agency on 
the determination referred to in clause (A) for any individual 
with respect to whom it is made. 

At the option of a State (if its plan approved under this title so pro- 
vides), such term (i) need not include money payments to an individ- 
ual who has been absent from such State for a period in excess of ninety 
consecutive days (regardless of whether he has maintained his resi- 
dence in such State during such period) until he has been present in 
such State for thirty consecutive days in the case of such an individual 
who has maintained his residence in such State during such period or 
ninety consecutive days in the case of any other such individual, and 
(ii) may include rent payments made directly to a public housing 
agency on behalf of a recipient or a group or groups of recipients of 
aid under such plan. 

(b) For purposes of this title, the term "medical assistance for the 
aged" means payment of part or all of the cost of the following care 
and services (if provided in or after the third month before the month 
in which the recipient makes application for assistance) for individ- 
uals who are sixty-five years of age or older and who are not recipients 
of aid to the aged, blind, or disabled (except, for any month, for recipi- 
ents of aid to the aged, blind, or disabled who are admitted to or dis- 
charged from a medical institution during such month) but whose 
income and resources are insufficient to meet all of such cost — 

( 1 ) inpatient hospital services ; 

(2) skilled nursing-home services; 

(3) physicians' services ; 

(4) outpatient hospital or clinic services ; 



371 



Sec. 1605(b) 



( 5 ) home health care services ; 

( 6 ) private duty nursing services ; 

(7) physical therapy and related services ; 

(8) dental services ; 

(9) laboratory and X-ray services; 

(10) prescribed drugs, eyeglasses, dentures, and prosthetic de- 
vices ; 

(11) diagnostic, screening, and preventive services; and 

(12) any other medical care or remedial care recognized under 
State law ; 

except that such term does not include any such payments with respect 
to care or services for any individual who is an inmate of a public 
institution (except as a patient in a medical institution). 



TITLE XVT — SUPPLEMENTAL SECURITY INCOME FOR 
THE AGED, BLIND, AND DISABLED 

Page 1 

Sec. 1601. Purpose; appropriations 373 

Sec. 1602. Basic eligibility for benefits 374 

Paet A — Determination of Benefits 

Sec. 1611. Eligibility for and amount of benefits 374 

(a) Definition of eligible individual 374 

(b) Amount of benefits 374 

(c) Period for determination of benefits 375 

(d) Special limits on gross income 375 

(e) Limitation on eligibility of certain individuals 375 

(f ) Suspension of payments to individuals who are outside 

the United States 376 

(g) Certain individuals deemed to meet resources test 377 

(h) Certain individuals deemed to meet income test 377 

Sec. 1612. Income 378 

(a) Meaning of income 378 

(b) Exclusions from income 379 

Sec. 1613. Resources 380 

(a) Exclusions from resources 380 

(b) Disposition of resources 381 

Sec. 1614. Meaning of terms 381 

(a) Aged, blind, or disabled individual 381 

(b) Eligible spouse 383 

(c) Definition of child 384 

(d) Determination of marital relationships 384 

(e) United States 384 

(f) Income and resources of individuals other than eli- 

gible individuals and eligible spouses 384 

Sec. 1615. Rehabilitation services for blind and disabled individuals 385 

Sec. 1616. Optional State Supplementation 385 

Sec. 1617. Cost-of-living adjustments in benefits 387 

Part B — Procedural and General Provisions 

Sec. 1631. Payments and procedures 388 

(a) Payment of benefits 388 

(b) Overpayments and underpayments 388 

(c) Hearings and review 389 

(d) Procedures : prohibitions of assignments; representa- 

tion of claimants 389 

(e) Applications and furnishing of information 390 

(f ) Furnishing of information by other agencies 391 

(g) Reimbursement to States for interim assistance pay- 

ments 391 

Sec. 1632. Penalties for fraud 392 

Sec. 1633. Administration 393 

Sec. 1634. Determinations of medicaid eligibility 393 

Purpose ; Appropriations 

Section 1601. For the purpose of establishing a national program to 
provide supplemental security income to individuals who have attained 
age 65 or are blind or disabled, there are authorized to be appropriated 
sums sufficient to carry out this title. 



This table of contents does not appear in the law. 

(373) 



Sec. 1602 



374 



Basic Eligibility for Benefits 

Section 1602. Every aged, blind, or disabled individual who is deter- 
mined under part A to be eligible on the basis of his income and 
resources shall, in accordance with and subject to the provisions of 
this title, be paid benefits by the Secretary of Health, Education, and 
Welfare. 

Part A — Determination of Benefits 
Eligibility for and Amount of Benefits 
Definition of Eligible Individual 

Sec. 1611. (a) (1) Each aged, blind, or disabled individual who does 
not have an eligible spouse and — 

(A) whose income, other than income excluded pursuant to 
section 1612 (b) , is at a rate of not more than $1,752 (or, if greater, 
the amount determined under section 1617) 1 for the calendar year 
1974 or any calendar year thereafter, and 

(B) whose resources, other than resources excluded pursuant 
to section 1613(a), are not more than (i) in case such individual 
has a spouse with whom he is living, $2,250, or (ii) in case such 
individual has no spouse with whom he is living, $1,500, 

shall be an eligible individual for purposes of this title. 

(2) Each aged, blind, or disabled individual who has an eligible 
spouse and — 

(A) whose income (together with the income of such spouse), 
other than income excluded pursuant to section 1612(b), is at a 
rate of not more than $2,628 (or, if greater, the amount deter- 
mined under section 1617) 2 for the calendar year 1974, or any 
calendar year thereafter, and 

(B) whose resources (together with the resources of such 
spouse), other than resources excluded pursuant to section 1613 
(a) , are not more than $2,250, 

shall be an eligible individual for purposes of this title. 

Amounts of Benefits 

(b) (1) The benefit under this title for an individual who does not 
have an eligible spouse shall be payable at the rate of $1,752 (or, if 
greater, the amount determined under section 1617) 1 for the calendar 
year 1974 and any calendar year thereafter, reduced by the amount 
of income, not excluded pursuant to section 1612(b), of such 
individual. 

(2) The benefit under this title for an individual who has an 
eligible spouse shall be payable at the rate of $2,628 (or, if greater, the 
amount determined under section 1617) 2 for the calendar year 1974 and 

1 $1892.40 effective .Tulv, 1975. (40 F.R. 22289.) 

2 $2839.20 effective July, 1975. (40 F.R. 22289.) 



375 



Sec. 1611(e) 



any calendar year thereafter, reduced by the amount of income, not 
excluded pursuant to section 1612(b), of such individual and spouse. 

Period for Determination of Benefits 

(c) (1) An individual's eligibility for benefits under this title and 
the amount of such benefits shall be determined for each quarter of a 
calendar year except that, if the initial application for benefits is filed 
in the second or third month of a calendar quarter, such determina- 
tions shall be made for each month in such quarter. Eligibility for and 
the amount of such benefits for any quarter shall be redetermined at 
such time or times as may be provided by the Secretary. 

(2) For purposes of this subsection an application shall be con- 
sidered to be effective as of the first day of the month in which it was 
actually filed. 

Special Limits on Gross Income 

(d) The Secretary may prescribe the circumstances under which, 
consistently with the purposes of this title, the gross income from a 
trade or business (including farming) will be considered sufficiently 
large to make an individual ineligible for benefits under this title. For 
purposes of this subsection, the term "gross income" has the same 
meaning as when used in chapter 1 of the Internal Revenue Code of 
1954. 

Limitation on Eligibility of Certain Individuals 

(e) (1)(A) Except as provided in subparagraph (B), no person 
shall be an eligible individual or eligible spouse for purposes of this 
title with respect to any month if throughout such month he is an 
inmate of a public institution. 

(B) In any case where an eligible individual or his eligible spouse 
(if any) is, throughout any month, in a hospital, extended care 
facility, nursing home, or intermediate care facility receiving pay- 
ments (with respect to such individual or spouse) under a State plan 
approved under title XIX, the benefit under this title for such indi- 
vidual for such month shall be payable — 

(i) at a rate not in excess of $300 per year (reduced by the 
amount of any income not excluded pursuant to section 1612(b) ) 
in the case of an individual who does not have an eligible spouse ; 

(ii) at a rate not in excess of the sum of the applicable rate 
specified in subsection (b)(1) and the rate of $300 per year 
(reduced by the amount of any income not excluded pursuant to 
section 1612(b) ) in the case of an individual who has an eligible 
spouse, if only one of them is in such a hospital, home, or facility 
throughout such month ; and 

(iii) at a rate not in excess of $600 per year (reduced by the 
amount of any income not excluded pursuant to section 1612(b) ) 



Sec. 1611(e) 



376 



in the case of an individual who has an eligible spouse, if both of 
them are in such a hospital, home, cr facility throughout such 
month. 

(2) No person shall be an eligible individual or eligible spouse for 
purposes of this title if, after notice to such person by the Secre- 
tary that it is likely that such person is eligible for any payments of 
the type enumerated in section 1612(a)(2)(B), such person fails 
within 30 days to take all appropriate steps to apply for and (if 
eligible) obtain any such payments. 

(3) (A) No person who is an aged, blind, or disabled individual 
solely by reason of disability (as determined under section 1614(a) 
(3) ) shall be an eligible individual or eligible spouse for purposes of 
this title with respect to any month if such individual is medically 
determined to be a drug addict or an alcoholic unless such individual 
is undergoing any treatment that may be appropriate for his condition 
as a drug addict or alcoholic (as the case may be) at an institution 
or facility approved for purposes of this paragraph by the Secretary 
(so long as such treatment is available) and demonstrates that he is 
complying with the terms, conditions, and requirements of such treat- 
ment and with requirements imposed by the Secretary under subpara- 
graph (B). 

(B) The Secretary shall provide for the monitoring and testing 
of all individuals who are receiving benefits under this title and who 
as a condition of such benefits are required to be undergoing treat- 
ment and complying with the terms, conditions, and requirements 
thereof as described in subparagraph (A), in order to assure such 
compliance and to determine the extent to which the imposition of 
such requirement is contributing to the achievement of the purposes 
of this title. The Secretary shall annually submit to the Congress a 
full and complete report on his activities under this paragraph. 

Suspension of Payments to Individuals Who Are Outside the United States 

(f) Notwithstanding any other provision of this title, no indi- 
vidual shall be considered an eligible individual for purposes of this 
title for any month during all of which such individual is outside the 
United States (and no person shall be considered the eligible spouse 
of an individual for purposes of this title with respect to any month 
during all of which such person is outside the United States). For 
purposes of the preceding sentence, after an individual has been outside 
the United States for any period of 30 consecutive days, he shall be 
treated as remaining outside the United States until he has been in 
the United States for a period of 30 consecutive days. 



Sec. 1611(h) 



Certain Individuals Deemed To Meet Resources Test 

(g) In the case of any individual or any individual and his spouse 
(as the case may be) who — 

(1) received aid or assistance for December 1973 under a plan 
of a State approved under title I, X, XIV, or XVI, 

(2) has, since December 31, 1973, continuously resided in the 
State under the plan of which he or they received such aid or 
assistance for December 1973, and 

(3) has, since December 31, 1973, continuously been (except for 
periods not in excess of six consecutive months) an eligible 
individual or eligible spouse with respect to whom supplemental 
security income benefits are payable, 

the resources of such individual or such individual and his spouse (as 
the case may be) shall be deemed not to exceed the amount specified in 
sections 1611(a) (1) (B) and 1611(a) (2) (B) during any period that 
the resources of such individual or individuals and his spouse (as the 
case may be) does not exceed the maximum amount of resources speci- 
fied in the State plan, as in effect for October 1972, under which he or 
they received such aid or assistance for December 1973. 

Certain Individuals Deemed To Meet Income Test 

(h) In determining eligibility for, and the amount of, benefits 
payable under this section in the case of any individual or any indi- 
vidual and his spouse (as the case may be) who — 

(1) received aid or assistance for December 1973 under a plan 
of a State approved under title X or XVI, 

(2) is blind under the definition of that term in the plan, as 
in effect for October 1972, under which he or they received such 
aid or assistance for December 1973, 

(3) has, since December 31, 1973, continuously resided in the 
State under the plan of which he or they received such aid or 
assistance for December 1973, and 

(4) has, since December 31, 1973, continuously been (except 
for periods not in excess of six consecutive months) an eligible 
individual or an eligible spouse with respect to whom supple- 
mental security income benefits are payable, 

there shall be disregarded an amount equal to the greater of (A) the 
maximum amount of any earned or unearned income which could have 
been disregarded under the State plan, as in effect for October 1972, 
under which he or they received such aid or assistance for December 
1973, and (B) the amount which would be required to be disregarded 
under section 1612 without application of this subsection. 



64-310 O - 76 - 25 



Sec. 1612(a) 



378 



Income 
Meaning of Income 

Sec. 1612. (a) For purposes of this title, income means both earned 
income and unearned income ; and — 

(1) earned income means only — 

(A) wages as determined under section 203(f) (5) (C) ; and 

(B) net earnings from self -employment, as defined in sec- 
tion 211 (without the application of the second and third 
sentences following subsection (a) (10), and the last para- 
graph of subsection (a)), including earnings for services 
described in paragraphs (4), (5), and (6) of subsection (c) ; 
and 

(2) unearned income means all other income, including — 
(A) support and maintenance furnished in cash or kind; 

except that (i) in the case of any individual (and his eligible 
spouse, if any) living in another person's household and 
receiving support and maintenance in kind from such person, 
the dollar amounts otherwise applicable to such individual 
(and spouse) as specified in subsections (a) and (b) of sec- 
tion 1611 shall be reduced by 33% percent in lieu of including 
such support and maintenance in the unearned income of 
such individual (and spouse) as otherwise required by this 
subparagraph and (ii) in the case of any individual or his 
eligible spouse who resides in a nonprofit retirement home or 
similar nonprofit institution, support and maintenance shall 
not be included to the extent that it is furnished to such in- 
dividual or such spouse without such institution receiving 
payment therefor (unless such institution has expressly 
undertaken an obligation to furnish full support and main- 
tenance to such individual or spouse without any current or 
future payment therefor) or payment therefore is made by 
another nonprofit organization ; 

(B) any payments received as an annuity, pension, retire- 
ment, or disability benefit, including veterans' compensation 
and pensions, workmen's compensation payments, old-age, 
survivors, and disability insurance benefits, railroad retire- 
ment annuities and pensions, and unemployment insurance 

benefits ; 

( C ) prizes and awards ; 

(D) the proceeds of any life insurance policy to the extent 
that they exceed the amount expended by the beneficiary for 
purposes of the insured individual's last illness and burial 
or $1,500, whichever is less ; 



379 



Sec. 1612(b) 



(E) gifts (cash or otherwise), support and alimony pay- 
ments, and inheritances ; and 

(F) rents, dividends, interest, and royalties. 

Exclusions From Income 

(b) In determining the income of an individual (and his eligible 
spouse) there shall be excluded — 

(1) subject to limitations (as to amount or otherwise) pre- 
scribed b}' the Secretary, if such individual is a child who is, as 
determined by the Secretary, a student regularly attending a 
school, college, or university, or a course of vocational or technical 
training designed to prepare him for gainful employment, the 
earned income of such individual ; 

(2) (A) the first $240 per year (or proportionately smaller 
amounts for shorter periods) of income (whether earned or un- 
earned) other than income which is paid on the basis of the need 
of the eligible individual ; 

(B) Monthly (or other periodic) payments received by any in- 
dividual, under a program established prior to July 1, 1973, if such 
payments are made by the State of which the individual receiving 
such payments is a resident, and if eligibility of any individual 
for such payments is not based on need and is based solely on at- 
tainment of age 65 and duration of residence in such State by such 
individual. 1 

(3) (A) the total unearned income of such individual (and 
such spouse, if any) in a calendar quarter which, as determined in 
accordance with criteria prescribed by the Secretary, is received 
too infrequently or irregularly to be included, if such income so 
received does not exceed $60 in such quarter, and (B) the total 
earned income of such individual (and such spouse, if any) in a 
calendar quarter which, as determined in accordance with such 
criteria, is received too infrequently or irregularly to be included, 
if such income so received does not exceed $30 in such quarter ; 

(4) (A) if such individual (or such spouse) is blind (and has 
not attained age 05, or received benefits under this title (or aid 
under a State plan approved under section 1002 or 1602) for the 
month before the month in which he attained age 65), (i) the first 
$780 per year (or proportionately smaller amounts for shorter 
periods) of earned income not excluded by the preceding para- 
graphs of this subsection, plus one-half of the remainder thereof, 
(ii) an amount equal to any expenses reasonably attributable to 
the earning of any income, and (iii) such additional amounts of 
other income, where such individual has a plan for achieving 

1 Subparagraph (B) added by section 9 of Public Law 94-202. 



Sec. 1612(b) 



380 



self-support approved by the Secretary, as may be necessary for 
the fulfillment of such plan, 

(B) if such individual (or such spouse) is disabled but not 
blind (and has not attained age 65, or received benefits under this 
title (or aid under a State plan approved under section 1402 or 
1602) for the month before the month in which he attained age 
65), (i) the first $780 per year (or proportionately smaller 
amounts for shorter periods) of earned income not excluded by 
the preceding paragraphs of this subsection, plus one-half of the 
remainder thereof, and (ii) such additional amounts of other in- 
come, where such individual has a plan for achieving self-support 
approved by the Secretary, as may be necessary for the fulfillment 
of such plan, or 

(C) if such individual (or such spouse) has attained age 65 
and is not included under subparagraph (A) or (B), the first 
$780 per year (or proportionately smaller amounts for shorter 
periods) of earned income not excluded by the preceding para- 
graphs of this subsection, plus one-half of the remainder thereof ; 

(5) any amount received from any public agency as a return 
or refund of taxes paid on real property or on food purchased 
by such individual (or such spouse) ; 

(6) assistance described in section 1616(a) which is based on 
need and furnished by any State or political subdivision of a 
State ; 

(7) any portion of any grant, scholarship, or fellowship 
received for use in paying the cost of tuition and fees at any edu- 
cational (including technical or vocational education) institution ; 

(8) home produce of such individual (or spouse) utilized by the 
household for its own consumption ; 

(9) if such individual is a child, one-third of any payment for 
his support received from an absent parent ; and 

(10) any amounts received for the foster care of a child who 
is not an eligible individual but who is living in the same home 
as such individual and was placed in such home by a public or 
nonprofit private child-placement or child-care agency. 

Resources 

Exclusions From Resources 

Sec. 1613. (a) In determining the resources of an individual (and 
his eligible spouse, if any) there shall be excluded — 

(1) the home (including the land that appertains thereto), to 
the extent that its value does not exceed such amount as the Secre- 
tary determines to be reasonable ; 



381 



Sec. 16.14(a) 



(2) household goods, personal effects, and an automobile, to 
the extent that their total value does not exceed such amount as 
the Secretary determines to be reasonable ; 

(3) other property which, as determined in accordance with 
and subject to limitations prescribed by the Secretary, is so essen- 
tial to the means of self-support of such individual (and such 
spouse) as to warrant its exclusion ; 

(4) such resources of an individual who is blind or disabled 
and who has a plan for achieving self-support approved by the 
Secretary, as may be necessary for the fulfillment of such plan ; 
and 

(5) in the case of Natives of Alaska, shares of stock held in a 
Kegional or a Village Corporation, during the period of twenty 
years in which such stock is inalienable, as provided in section 
7(h) and section 8(c) of the Alaska Native Claims Settlement 
Act. 

In determining the resources of an individual (or eligible spouse) an 
insurance policy shall be taken into account only to the extent of its 
cash surrender value; except that if the total face value of all life 
insurance policies on any person is $1,500 or less, no part of the value 
of any such policy shall be taken into account. 

Disposition of Resources 

(b) The Secretary shall prescribe the period or periods of time 
within which, and the manner in which, various kinds of property 
must be disposed of in order not to be included in determining an indi- 
vidual's eligibility for benefits. Any portion of the individual's bene- 
fits paid for any such period shall be conditioned upon such disposal ; 
and any benefits so paid shall (at the time of the disposal) be con- 
sidered overpayments to the extent they would not have been paid 
had the disposal occurred at the beginning of the period for which 
such benefits were paid. 

Meaning of Terms 

Aged, Blind, or Disabled Individual 

Sec. 1614. (a)(1) For purposes of this title, the term "aged, blind, 
or disabled individual" means an individual who — 

(A) is 65 years of age or older, is blind (as determined under 
paragraph (2)), or is disabled (as determined under paragraph 
(3)), arid ftj 'T* % ^ 1 : 

(B) is a resident of the United States, and is either (i) a 
citizen or (ii) an alien lawfully admitted for permanent residence 
or otherwise permanently residing in the United States under 



Sec. 1614(a) 



382 



color of law (including any alien who is lawfully present in the 
United States as a result of the application of the provisions of 
section 203(a) (7) or section 212(d) (5) of the Immigration and 
Nationality Act). 

(2) An individual shall be considered to be blind for purposes 
of this title if he has central visual acuity of 20/200 or less in the 
better eye with the use of a correcting lens. An eye which is accom- 
panied by a limitation in the fields of vision such that the widest diam- 
eter of the visual field subtends an angle no greater than 20 degrees 
shall be considered for purposes of the first sentence of this sub- 
section as having a central visual acuity of 20/200 or less. An individ- 
ual shall also be considered to be blind for purposes of this title if 
he is blind as defined under a State plan approved under title X or 
XVI as in effect for October 1972 and received aid under such plan 
(on the basis of blindness) for December 1973, so long as he is con- 
tinuously blind as so defined. 

(3) (A) An individual shall be considered to be disabled for pur- 
poses of this title if he is unable to engage in any substantial gainful 
activity by reason of any medically determinable physical or mental 
impairment which can be expected to result in death or which has 
lasted or can be expected to last for a continuous period of not less 
than twelve months (or, in the case of a child under the age of 18, 
if he suffers from any medically determinable physical or mental 
impairment of comparable severity). 

(B) For purposes of subparagraph (A), an individual shall be 
determined to be under a disability only if his physical or mental 
impairment or impairments are of such severity that he is not only 
unable to do his previous work but cannot, considering his age, educa- 
tion, and work experience, engage in any other kind of substantial 
gainful work which exists in the national economy, regardless of 
whether such work exists in the immediate area in which he lives, or 
whether a specific job vacancy exists for him, or whether he would 
be hired if he applied for work. For purposes of the preceding sen- 
tence (with respect to any individual), "work which exists in the 
national economy" means work which exists in significant numbers 
either in the region where such individual lives or in several regions 
of the country. 

(C) For purposes of this paragraph, a physical or mental impair- 
ment is an impairment that results from anatomical, physiological, or 
psychological abnormalities which are demonstrable by medically ac- 
ceptable clinical and laboratory diagnostic techniques. 

(D) The Secretary shall by regulations prescribe the criteria for 
determining when services performed or earnings derived from serv- 
ices demonstrate an individual's ability to engage in substantial gain- 
ful activity. Notwithstanding the provisions of subparagraph (B), an 



383 



Sec. 1614(b) 



individual whose services or earnings meet such criteria, except for 
purposes of paragraph (4), shall be found not to be disabled. 

(E) Notwithstanding the provisions of subparagraphs (A) 
through (D), an individual shall also be considered to be disabled 
for purposes of this title if he is permanently and totally disabled 
as defined under a State plan approved under title XIV or XVI 
as in effect for October 1972 and received aid under such plan (on 
the basis of disability) for December 1973 (and for at least one month 
prior to July 1973), so long as he is continuously disabled as so 
defined. 

(4) (A) For purposes of this title, any services rendered during a 
period of trial work (as defined in subparagraph (B)) by an indi- 
vidual who is an aged, blind, or disabled individual solely by reason 
of disability (as determined under paragraph (3) of this subsection) 
shall be deemed not to have been rendered by such individual in de- 
termining whether his disability has ceased in a month during such 
period. As used in this paragraph, the term "services" means activity 
which is performed for remuneration or gain or is determined by the 
Secretary to be of a type normally performed for remuneration or 
gain. 

(B) The term "period of trial work", with respect to an individual 
who is an aged, blind, or disabled individual solely by reason of dis- 
ability (as determined under paragraph (3) of this subsection) , means 
a period of months beginning and ending as provided in subpara- 
graphs (C) and (D). 

(C) A period of trial work for any individual shall begin with the 
month in which he becomes eligible for benefits under this title on the 
basis of his disability ; but no such period may begin for an individual 
who is eligible for benefits under this title on the basis of a disability 
if he has had a previous period of trial work while eligible for benefits 
on the basis of the same disability. 

(D) A period of trial work for any individual shall end with the 
close of whichever of the following months is the earlier: 

(i) the ninth month, beginning on or after the first day of 
such period, in which the individual renders services (whether 
or not such nine months are consecutive) ; or 

(ii) the month in which his disability (as determined under 
paragraph (3) of this subsection) ceases (as determined after 
the application of subparagraph (A) of this paragraph). 

Eligible Spouse 

(b) For purposes of this title, the term "eligible spouse" means an 
aged, blind, or disabled individual who is the husband or wife of 
another aged, blind, or disabled individual and who has not been 
living apart from such other aged, blind, or disabled individual for 



Sec. 1614(b) 



384 



more than six months. If two aged, blind, or disabled individuals are 
husband and wife as described in the preceding sentence, only one of 
them may be an "eligible individual" within the meaning of section 
1611(a). f^mmil 

Definition of Child 

(c) For purposes of this title, the term "child" means an individual 
who is neither married nor (as determined by the Secretary) the head 
of a household, and who is (1) under the age of eighteen, or (2) under 
the age of twenty -two and (as determined by the Secretary) a student 
regularly attending a school, college, or university, or a course of 
vocational or technical training designed to prepare him for gainful 
employment. 

Determination of Marital Relationships 

(d) In determining whether two individuals are husband and wife 
for purposes of this title, appropriate State law shall be applied; 
except that — 

(1) if a man and woman have been determined to be husband 
and wife under section 216(h) (1) for purposes of title II they 
shall be considered (from and after the date of such determina- 
tion or the date of their application for benefits under this title, 
whichever is later) to be husband and wife for purposes of this 
title, or 

(2) if a man and woman are found to be holding themselves 
out to the community in which they reside as husband and wife, 
they shall be so considered for purposes of this title notwith- 
standing any other provision of this section. 

United States 

(e) For purposes of this title, the term "United States", when used 
in a geographical sense, means the 50 States and the District of 
Columbia. 

Income and Resources of Individuals Other Than Eligible Individuals and 

Eligible Spouses 

(f) (1) For purposes of determining eligibility for and the amount 
of benefits for any individual who is married and whose spouse is liv- 
ing with him in the same household but is not an eligible spouse, such 
individual's income and resources shall be deemed to include any 
income and resources of such spouse, whether or not available to 
such individual, except to the extent determined by the Secretary to 
be inequitable under the circumstances. 

(2) For purposes of determining eligibility for and the amount of 
benefits for any individual who is a child under age 21, such indi- 
vidual's income and resources shall be deemed to include any income 
and resources of a parent of such individual (or the spouse of such a 
parent) who is living in the same household as such individual, 



385 



Sec. 1616(b) 



whether or not available to such individual, except to the extent de- 
termined by the Secretary to be inequitable under the circumstances. 

Rehabilitation Services for Blind and Disabled Individuals 

Sec. 1615. (a) In the case of any blind or disabled individual who — 

( 1 ) has not attained age 65, and 

(2) is receiving benefits (or with respect to whom benefits are 
paid) under this title, 

the Secretary shall make provision for referral of such individual to 
the appropriate State agency administering the State plan for voca- 
tional rehabilitation services approved under the Vocational Rehabili- 
tation Act, and (except in such cases as he may determine) for a re- 
view not less often than quarterly of such individual's blindness or 
disability and his need for and utilization of the rehabilitation services 
made available to him under such plan. 

(b) Every individual with respect to whom the Secretary is 
required to make provision for referral under subsection (a) shall 
accept such rehabilitation services as are made available to him under 
the State plan for vocational rehabilitation services approved under 
the Vocational Rehabilitation Act; and the Secretary is authorized 
to pay to the State agency administering or supervising the adminis- 
tration of such State plan the costs incurred in the provision of such 
services to individuals so referred. 

(c) No individual s'.iall be an eligible individual or eligible spouse 
for purposes of this title if he refuses without good cause to accept 
vocational rehabilitation services for which he is referred under sub- 
section (a). 

Optional State Supplementation 

Sec. 1616. (a) Any cash payments which are made by a State 
(or political subdivision thereof) on a regular basis to individuals 
who are receiving benefits under this title or who would but for their 
income be eligible to receive benefits under this title, as assistance 
based on need in supplementation of such benefits (as determined 
by the Secretary), shall be excluded under section 1612(b) (6) in de- 
termining the income of such individuals for purposes of this title 
and the Secretary and such State may enter into an agreement which 
satisfies subsection (b) under which the Secretary will, on behalf of 
such State (or su